Estimating the Impact of Medical Innovation: A Case Study of HIV Antiretroviral Treatments
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Mark G Duggan
As health care consumes a growing share of GDP, the demand for better evidence regarding the effects of health care treatments and how these vary across individuals is increasing. Estimating this with observational data is difficult given the endogeneity of treatment decisions. But because the random assignment clinical trials (RACTs) used in the FDA approval process only estimate average health effects and do not consider spending, there is no good alternative. In this study we use administrative data from California's Medicaid program to estimate the impact of HIV antiretroviral treatments (ARVs). We use data on health care utilization to proxy for health status and exploit the rapid takeup of ARVs following their FDA approval. Our estimate of a 68 percent average mortality rate reduction is in line with the results from RACTs. We also find that the ARVs lowered short-term health care spending by reducing expenditures on other categories of medical care. Combining these two effects we estimate the cost per life year saved at $19,000. Our results suggest an alternative method for estimating the real-world effects of new treatments that is especially well-suited to those treatments that diffuse rapidly following their approval.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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- Estimating the Impact of Medical Innovation: A Case Study of HIV Antiretroviral Treatments
- Hospital Quality and Selective Contracting: Evidence from Kidney Transplantation
- Large Health Savings Accounts: A Step toward Tax Neutrality for Health Care
- Consumer-Directed Health Plans and Health Savings Accounts: Have They Worked for Small Business?
- Labor Market Consequences of State Mental Health Parity Mandates
- The Reality of SCHIP and Uninsureds: Do SCHIP Mandatory Wait Periods Increase the Uninsured Rolls?
- Dynamic Cost-Effectiveness: A More Efficient Reimbursement Criterion
- State Health Insurance Regulations and the Price of High-Deductible Policies
- The Utilization of Medicines beyond Patent Expiration
- Explanations for Persistent Nursing Shortages
- Quality Effect of Early Discharge of Maternity Patients: Does Hospital Specialization Matter?
Articles in the same Issue
- Article
- Estimating the Impact of Medical Innovation: A Case Study of HIV Antiretroviral Treatments
- Hospital Quality and Selective Contracting: Evidence from Kidney Transplantation
- Large Health Savings Accounts: A Step toward Tax Neutrality for Health Care
- Consumer-Directed Health Plans and Health Savings Accounts: Have They Worked for Small Business?
- Labor Market Consequences of State Mental Health Parity Mandates
- The Reality of SCHIP and Uninsureds: Do SCHIP Mandatory Wait Periods Increase the Uninsured Rolls?
- Dynamic Cost-Effectiveness: A More Efficient Reimbursement Criterion
- State Health Insurance Regulations and the Price of High-Deductible Policies
- The Utilization of Medicines beyond Patent Expiration
- Explanations for Persistent Nursing Shortages
- Quality Effect of Early Discharge of Maternity Patients: Does Hospital Specialization Matter?
