The Technology of Birth: Is It Worth It?

Cutler David M. and Meara Ellen
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Cutler David M.: Harvard University and NBER
Meara Ellen: Harvard University and NBER

Forum for Health Economics & Policy, 2000, vol. 3, issue 1, 37

Abstract: We evaluate the costs and benefits of increased medical spending for low-birthweight infants. Lifetime spending on low-birthweight babies increased by roughly $40,000 per birth between 1950 and 1990. The health improvements resulting from this have been substantial. Infant mortality rates fell by 72 percent over this time period, largely due to improved care for premature births. Considering both length and quality of life, we estimate the rate of return for care of low-birthweight infants at over 500 percent. Although prenatal care and influenza shots are more cost-effective than neonatal care, it is significantly more cost-effective than other recent innovations, such as coronary artery bypass surgery, treatment of severe hypertension, or routine Pap smears for women aged 20 to 74. We conclude that the answer to the question posed in this paper is a resounding yes.

Date: 2000
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DOI: 10.2202/1558-9544.1016

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