Measuring the Gains from Medical Research: An Economic Approach

University of Chicago Press
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In 1998, health expenditures in the United States accounted for 12.9% of national income-the highest share of income devoted to health in the developed world. The United States also spends more on medical research than any other country-in 2000, the federal government dedicated $18.4 billion to it, compared with only $3.7 billion for the entire European Union. In this book, leading health economists ask whether we are getting our money's worth.

From an economic perspective, they find, the answer is a resounding "yes": in fact, considering the extraordinary value of improvements to health, we may even be spending too little on medical research. The evidence these papers present and the conclusions they reach are both surprising and convincing: that growth in longevity since 1950 has been as valuable as growth in all other forms of consumption combined; that medical advances producing 10% reductions in mortality from cancer and heart disease alone would add roughly $10 trillion-a year's GDP-to the national wealth; or that the average new drug approved by the FDA yields benefits worth many times its cost of development.

The papers in this book are packed with these and many other surprising revelations, their sophisticated analysis persuasively demonstrating the massive economic benefits we can gain from investments in medical research. For anyone concerned about the cost and the value of such research-from policy makers to health care professionals and economists-this will be a landmark book.
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About the author

Kevin M. Murphy is the George J. Stigler Professor of Economics in the Graduate School of Business and the Department of Economics at the University of Chicago. He is coauthor of Social Economics: Market Behavior in a Social Environment.

Robert H. Topel is the Isidore Brown and Gladys J. Brown Professor in Urban and Labor Economics in the Graduate School of Business at the University of Chicago. He is coeditor of The Welfare State in Transition and Labor Market Data and Measurement, both published by the University of Chicago Press.
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Additional Information

Publisher
University of Chicago Press
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Published on
Apr 15, 2010
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Pages
240
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ISBN
9780226551791
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Language
English
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Genres
Business & Economics / General
Medical / General
Medical / Health Care Delivery
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Content Protection
This content is DRM protected.
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During the 1990s, an unprecedented number of Americans turned to complementary and alternative medicine (CAM), an umbrella term encompassing chiropractic, energy healing, herbal medicine, homeopathy, meditation, naturopathy, and traditional Chinese medicine. By 1997, nearly half the US population was seeking CAM, spending at least $27 billion out of pocket.

Bounding Biomedicine centers on this boundary-changing era, looking at how consumer demand shook the health care hierarchy. Drawing on scholarship in rhetoric and science and technology studies, the book examines how the medical profession scrambled to maintain its position of privilege and prestige, even as its foothold appeared to be crumbling. Colleen Derkatch analyzes CAM-themed medical journals and related discourse to illustrate how members of the medical establishment applied Western standards of evaluation and peer review to test health practices that did not fit easily (or at all) within standard frameworks of medical research. And she shows that, despite many practitioners’ efforts to eliminate the boundaries between “regular” and “alternative,” this research on CAM and the forms of communication that surrounded it ultimately ended up creating an even greater division between what counts as safe, effective health care and what does not.

At a time when debates over treatment choices have flared up again, Bounding Biomedicine gives us a possible blueprint for understanding how the medical establishment will react to this new era of therapeutic change.
Sorrel King was a 32-year-old mother of four when her eighteen-month-old daughter, Josie, was horribly burned by water from a faulty water heater in the family’s new Baltimore home. She was taken to Johns Hopkins—renowned as one of the best hospitals in the world—and Sorrel stayed in the hospital with Josie day-in and day-out until she had almost completely recovered. Just before her discharge, however, Sorrel noticed something was wrong—Josie was looking pale, she appeared severely dehydrated, and her eyes were rolling back in her head. Sorrel pleaded with the doctors and nurses (many of whom she had become close to) that something was wrong, and they agreed to stop administering Josie methadone, the narcotic they were using to wean her off morphine. Josie had begun noticeably improving when a new nurse approached her with a syringe of methadone. When Sorrel tried to stop her from administering the drug, the nurse said that the orders had been changed again. Sorrel, against her better judgment, decided that Hopkins must know best, and stepped back. Almost as soon as the drug had been injected into Josie’s system, she went into cardiac arrest. The doctors raced to save her, but by the time they stabilized her, Josie was brain dead, her organs shutting down one by one. She passed away shortly thereafter, her family having made the choice to take her off life support.


In the days and months that followed, Sorrel went through the tumultuous processes of grieving. For a while, she thought she would not survive; suicide and alcohol both seemed like viable escape possibilities, and Sorrel toyed with both. But ultimately it was her rage that kept her alive—rage at the doctors, at Hopkins, and at the medical institution that had allowed this to happen. She wanted the doctors to feel the same pain she had caused them. She wanted to destroy Hopkins “brick by brick.” Dizzy with grief, she came close to ending her marriage, but slowly pulled herself and her life back together, for the sake of her family, and for the memory of Josie.


It was around this time that Sorrel learned a staggering fact—though indeed an error, Josie’s death wasn’t a fluke in the statistical sense of the word. About 98,000 American patients die a year as the result of medical error, making it the fourth most prevalent cause of death in the US. Armed with this fact, the money from her settlement with Hopkins, and a vague awareness that Josie’s death could have been prevented, Sorrel began to penetrate the healthcare industry. An appearance on Good Morning America and a long article in the Baltimore Sun raised the public profiles of her and her mission, while speaking requests began to pour in from hospitals and healthcare groups across the world. For the most part, medical errors had simply not been talked about; most doctors involved in them were paralyzed by remorse and fear of lawsuits, while the patients were dead or badly injured and their families crippled by grief. Sorrel was helping to pull back the curtain on an all-too-common killer, and the world of healthcare knew it. Despite some initial resistance, most in the industry came to welcome her message, and to look to her for answers. With the help of other patient safety advocates—many of them doctors, and some of them the very Hopkins officials who had defended the hospital after Josie’s death—Sorrel and The Josie King Foundation began to develop and implement in hospitals basic programs that emphasize communication, respect of the patient, and attentiveness to their concerns. Rapid Response Teams, for instance, can be called from the beside by patients or their families who feel they are experiencing a serious change in their condition that is not getting sufficient attention from hospital floor staff. A team made up of doctors, nurses and a patient relations coordinator responds quickly to evaluate the patient and develop a plan for care. This is just one example of a program that came out of Sorrel’s efforts, and it’s in place in hospitals across the country, and has saved countless lives.


Sorrel’s account of her unlikely path from grieving parent to nationally renowned advocate is interwoven with descriptions of her and her family’s slow but steady road to recovery, and ends with a deeply affecting description of a ski trip they took recently. The sun is shining, her children are healthy, and they are all profoundly happy—a condition that Sorrel has learned to appreciate all the more for Josie.

The book ends with a resource guide for patients, their families, and healthcare providers; it includes information about how to best manage a hospital stay and how to handle a medical error if one does occur. Two prominent characters from the story, Hopkins’ lawyer Rick Kidwell and Paul Bekman, the personal injury attorney who handled the case for the King family, have come together to contribute advice in a Q & A section, and Sorrel also provides lists of general advice, useful online resources, and essential books on the subject.
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