The return on investment in health care: From 1980 to 2000

Abstract

OBJECTIVE: To estimate the return on US investment (ROI) in overall health as well as four specific conditions. METHODS: The study utilized three distinct approaches to "triangulate" the evidence as related to ROI in health care: 1) an estimation of the average ROI in additional health-care service expenditures in the United States for the year 2000 compared with the year 1980, based on US summaries of health expenditures and health outcomes; 2) an estimate of the ROI in Medicare services for the period from 1985 to 2000 for treatment of heart attack, stroke, type 2 diabetes, and breast cancer, based on National Long-term Care Survey data and Medicare claims; and 3) an estimate of the ROI for selected major treatment innovations for the same four conditions during the period from 1975 to 2000. RESULTS: We calculated that each additional dollar spent on overall health-care services produced health gains valued at $1.55 to $1.94 under our base case assumptions. The return on health gains associated with treatment for heart attack, stroke, type 2 diabetes, and breast cancer were $1.10, $1.49, $1.55, and $4.80, respectively, for every additional dollar spent by Medicare. The ROI for specific treatment innovations ranged from both savings in treatment costs and gains in health to gains in health valued at $1.12 to $38.00 for every additional dollar spent. CONCLUSIONS: The value of improved health in the US population in 2000 compared with 1980 significantly outweighs the additional health-care expenditures in 2000 compared with 1980.