Causes and Consequences of the Increase in Treated Disease Prevalence
- Presenter:
Chair: David Meltzer; Discussant: Christopher J. Ruhm Mon June 5, 2006 17:15-18:45 Room 325
The proportion of the population treated for major medical conditions, including heart disease, diabetes, cancer, and mental illness, increased rapidly during the 1990s. We document these trends using data from the Medical Expenditure Panel Survey and Medicare claims data and show that increases in treated prevalence are responsible for a large share of the growth in health care spending. We then review evidence for and against the following explanations for increases in treated prevalence: changes in risk factors, availability of new medical technology, changes in the market structure of treatment provision (i.e. approval of new on-patent drug treatments), and the rise of a “culture of early diagnosis” in medicine. We find that obesity explains a substantial share of treated prevalence increases (34% for diabetes, 71% for high blood pressure, 10% for back problem, etc.), but large residuals remain for most conditions. We conclude that improvements in technology combined with an increasing emphasis in medicine on early detection are responsible for most of the increases. Understanding the impact of technology on incentives to diagnose new cases is important for explaining the mechanism by which medical technology increases health care costs.
