Comments due by Mar. 1 , 2015
So what do you think is the expenditure by the Medicare program justified?
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The Medicare prescription-drug benefit introduced in 2006 saved an estimated 19,000 to 27,000 lives in its first year by expanding access to medications that treat cardiovascular killers like strokes and heart disease, according to new research from the Federal Reserve Bank of San Francisco.
“While the exact magnitude of the number of lives saved depends on the particular specification, the basic result of a decline in cardiovascular-related deaths is shown to hold up across a multitude of robustness tests,” economists Abe Dunn and Adam Hale Shapiro wrote this month in a working paper, “Does Medicare Part D Save Lives?”
The Part D benefit, enacted by Congress in 2003 and introduced in 2006, subsidized drug coverage for elderly and disabled Americans through the Medicare program.
- A guide to the new Medicare drug prescription program in November 2005.
- Getty Images
To evaluate its effects, Mr. Dunn, of the Commerce Department’s Bureau of Economic Analysis, and Mr. Shapiro, a senior economist at the San Francisco Fed, analyzed data from the Centers for Medicare & Medicaid Services and the Centers for Disease Control and Prevention.
The benefit was introduced at the beginning of 2006, so the economists zoomed in on mid-2006 to mid-2007 “as the initial 12 months that Part D would have an impact on mortality,” they wrote. They used geographic differences in pre-2006 drug coverage to separate out the effects of the new benefit in terms of encouraging people to obtain medication. And they looked specifically at cardiovascular diseases like heart attacks and strokes, since they can be effectively and quickly treated with drugs that target high cholesterol, high blood pressure and blood clots.
They found that cardiovascular-related deaths declined, especially “in those counties that had a high share of individuals without drug coverage prior to the reform,” Messrs. Dunn and Shapiro wrote. That finding, they wrote, “offers strong evidence that Part D led to a sharp reduction in cardiovascular-related deaths, and the observation that we find no effect on noncardiovascular deaths bolsters this evidence.” Other analysis also supported that conclusion, they wrote.
“Estimates suggest that between 19,000 and 27,000 more individuals were alive in mid-2007 because of the Part D implementation in mid-2006,” they wrote.
Assuming a year of life is worth $200,000, they added, “we find that the additional value of life-years gained is between $3.9 billion and $5.4 billion, which greatly exceeds the additional out-of-pocket costs for cardiovascular-related drugs of approximately $870 million. In fact, the total benefit exceeds the total estimated additional spending on cardiovascular drugs from the program of $3.8 billion.”
Assuming a year of life is worth $200,000, they added, “we find that the additional value of life-years gained is between $3.9 billion and $5.4 billion, which greatly exceeds the additional out-of-pocket costs for cardiovascular-related drugs of approximately $870 million. In fact, the total benefit exceeds the total estimated additional spending on cardiovascular drugs from the program of $3.8 billion.”
(WSJ Blog)
19 comments:
I believe since the results are so substantial in the amount of lives saved, that the new program is indeed justified. Since the launch of the new program, individuals were able to afford vital medications, and it has made a tremendous impact. As far as the economy goes, I'm not sure if money is lost or gained. It seems that if these medicines are being circulated through pharmacies or what have you, that revenue is being made. Also, the demand is high for these types of drugs that can prolong or potentially save lives. I think the article was proof of that.
Healthcare is a huge money making industry since people who own and sell medication/treatment to patient's that need it, will almost always accept the price since they are all trying to better their lives. This new drug that is said to prevent deaths caused by heart attacks or strokes has really been doing wonders statistically. So many lives are now being saved which is great but the article doesn't really mention how the drug has an economic benefit to the producers.
I'm assuming that who ever owns and sells the drug is making a huge total profit by selling it to many hospitals and pharmacies. This drug is also high in demand as there are many people who either have cholosterol or high blood pressure.
This post shows how the medicare plan passed and enabled in 2006 has benefited a lot of people. The study showed the impact Plan D has made with people who suffer from cardiovascular killer such as heart attacks and strokes. The threat of theses killers are easily and effectively reduce by the use of high blood pressure, blood clotting and high cholesterol medicine. Plan D Medicare directly lead to the lives of 19,000 to 27,000 being saved from Cardiovascular killers.
Plan D Medicare is an example of how the government can take something that seems to be a private goods with million of dollars to be made in the medical field and make them a public good if the marginal benefit is greater than the marginal cost to put the medicine/health coverage out to the public. With the Government stepping in to help people who can not afford health care or medicine needs on their own we see the benefits and lives saved from this public good.
With “No Free Lunch” being said, the government has to cover the cost of producing these public good through taxation which can annoy or bother some people. I understand the good that this does for people, but it creates a lot of free-riders, but the cost of this is felt in everybody's pockets weather you pay for your own medical insurance or not. This can upset a lot of people who work hard everyday for medicare and the luxuries of modern medicine. Why should I pay for someone else healthcare when they won’t be there to help when your time is up.
To justify a new medicine is to question the cost of a life. A new drug can come out every year saving more and more lives just like how Part D did in this article. However this drug is extremely expensive while assuming the worth of a life as in this passage from the article "Assuming a year of life is worth $200,000, they added, “we find that the additional value of life-years gained is between $3.9 billion and $5.4 billion, which greatly exceeds the additional out-of-pocket costs for cardiovascular-related drugs of approximately $870 million. In fact, the total benefit exceeds the total estimated additional spending on cardiovascular drugs from the program of $3.8 billion.” This drug was analyzed over the first year after it was implemented and the outcome estimated 19,000-27,000 lives were saved. So Part D could be justified in two different ways, first money, almost everything could be attached to a dollar sign, as wrong as it may sound. Secondly the human side could be seen as saving thousands of lives no matter how much their 'free lunch' hindered other people.
After having read the article in my opinion I think that the program is very must justified. Since the program started it has saved an estimated 19,000 to 27,000 lives in the first year alone. The part D benefit subsidized drug coverage for elderly and disabled Americans through the Medicare program. In a particular study showed that through these medications that were given helped slow down the death rate especially for cardiovascular-related deaths. So the fact that it saving lives proves the fact that it is worth it.
This medicare program is justified. I explains the amount of lives that it has saved and saving lives is always a positive. 19,000 to 27,000 lives were saved because of this program. They took this private good and turned it into a public good resulting in multiple benefits. Each year there are going to be great medicine advancements and this advancement was a positive one. Although this does explain the benefits of all the lives being saved, what is the benefit to the economy? If people need this medicine they will pay for it. The producers are making a profit. This new program is justified.
The results are a benefit to society and the money spent is justified. Since the start of the program a substantial amount of people have been giving medicine from Medicare. "There is no free lunch", but this is worth spending. If we were to legalize marijuana and tax it. That money could be used to help pay for medicine for people who can't afford healthcare. There are many ways to raise total revenue for government spending. If we made more money, than we can save more lifes.
This article discusses the Part D benefit within the Medicare program. This benefit is said to expand access to medications that treat cardiovascular killers like strokes and heart disease for the elderly and disabled Americans. I believe it is a great thing for the elderly and many disabled Americans to be able to access these medications, however, this article fails to mention that with the government adding in new benefit plans comes more taxation. There is a need for more taxation in order to cover the cost of producing such plans and making them available to the public. The Part D benefit costs also vary depending what plan you choose, the drugs you use, and whether the drugs you use are covered by your plan. Additionally, I do not believe you can put a price on someone’s life such as the 200,000 dollars the article stated. In conclusion, this Medicare benefit plan may be beneficial to some but the cost is felt in everyone’s pocket whether you have your own medical coverage or Medicare.
As read in the article, “estimates suggest that between 19,000 and 27,000 more individuals were alive in mid-2007 because of the Part D implementation in mid-2006.” With this program it is not only benefiting the economy, but it is benefiting people as well. These cardiovascular patients are able to obtain this drug and extent their lifespan. With the ability for people to get these prescription drugs, it is increasing our population, which is helping the economy grow. “The Medicare prescription-drug benefit introduced in 2006 saved an estimated 19,000 to 27,000 lives in its first year.” As read in the article, the total benefit is greater than the amount of money spent on the cardiovascular drug.
The negative of this program is that it only benefits a certain group of people. This program may benefit people suffering with cardiovascular problems, but it is not benefiting other patients who have different illnesses who need to be taken care of as well.
I believe that the new system is much better since it helps people afford vital medications and procedures which they cant afford with the original
The Part D benefit is also known as the Medicare Prescription Drug Plan. It was introduced in 2006 in order to not only hopefully save lives, but aid the economy. Since the program began, more and more people are able to receive medications for cardiovascular diseases like heart attacks and stroke. Whether or not congress truly cares about its people is one thing, however according to them, the measly $870 million that it costs for cardiovascular drugs is no match for the value earned through someone’s life which is estimated to be in between $3.9 billion and $5.4 billion. From an economic, maybe heartless standpoint, I am not so sure that subsidizing drug coverage for elderly and disabled Americans is worth it. All of these big numbers assume that these individuals all go back to work full time and work to the fullest capacity. Now, personally, I think governments should work in the best interest of the health of their people before anything else. If Germany, Netherlands, Italy, Switzerland, The UK and many more can provide Universal health coverage, why can’t the United States?
I think that the Medicare Prescription Drug Plan is justified. It has benefited many people and has saved many lives. I think that the economy is benefiting from this program as well. The pharmacies and hospitals are making a big profit from selling the medicine. Also, since so many people need the medicine it is helping to make a bigger profit. I think that the program is justified because I think it is important for our government to take into consideration the health of the people and that is what this program is doing. However, it seems to me that this program is really only helping the people with cardiovascular problems and I think the government should help other people with other health problems.
I believe this program is justified after reading this article. I believe this because the article states 19000-27000 lives have been saved since Medicare Part D was put into effect. Although the cost is expensive, a price can't be put on someone's life. At the end of the article, the author states, "The total benefit exceeds the total spending." This is because the additional value of life-years is greater than out-of-pocket costs for other drugs. Therefor, I support this program
This article is talking about the expanding access to a life saving drug. In the article it estimates the values of a extra year of a human life as 200,000 dollars. The article also estimates that the drug would save 3.9 to 5.4 billion dollars worth of lives. It also said that it would cost healthcare providers only 870 million dollars out of pocket. I do not see the usual conflict in this article unlike the articles of the past.
I do not think that this program expenditure is justified. The benefit of $3.9 to $5.4 billion of life-years gained outweighs the out of pocket cost of $870 million. However how do you assume that a "year of life is worth $200,000"? Making the assumption that the majority of people using this program -for cardiovascular medications- are elderly, what are they then offering society? They are most likely retired and collecting social security and are not contributing to the economy in a way to justify their year of life worth.
There is a always a dispute for healthcare brought upon from a big pool of tax money because people are taking the benefit of the acts without having to provide monetarily. My mentality is that if it is helping people in our society, we should keep it up. We cannot be regarded as a society that cares not for all constituents because then we are not a fully functioning society. If this program is helping people, it is a good program and should be continued.
I believe that the Medicare program is justified due to the fact that they have saved a substantial amount of lives in its first few years it’s been produced. It has decreased the total of deaths within cardiovascular-related treatment especially in counties that have a high share of individuals without drug coverage. As stated in the article, “Estimates suggest that between 19,000 and 27,000 more individuals were alive in mid-2007 because of the Part D implementation in mid-2006,” this shows that plan D is highly effective and can be very beneficial to those who may need this form of medication. However, paying for this type of treatment may also be a problem. Plan D is shockingly expensive with the additional value of life-years costing nearly 3.9 to 5.4 billion and still exceeding. Nonetheless if people feel as if they should spend money for this medicine to help save someone’s life then they’ll pay for it regardless of the price tag.
The Medicare Program is definitely justified. Look at how many lives it saved in one year. Between 19,000 and 27,000 more individuals were able to survive these cardiovascular diseases thanks to Medicare. Yes, people will complain about paying the extra few dollars of tax, but the extra human lives are worth preserving. Also, businesses like hospitals and pharmacies make a lot of money off of these drugs, thus helping the economy.
What started as a great plan to provide care for the seniors, has been eaten away by the aging society. The cost of drugs, medical equipment has been rising therefore it is becoming increasing difficult for the federal government to provide for medicare notwithsranding the political pressure to reduce government spending. I fear the current system will increasingly find seniors shouldering more of the healthcare burden than they can afford to bear.The cost of plan D is shocking at the moment and it will only increase in the future..Since 2006 when Part D launched, premiums for Part D plans have increased by 50% and cost-sharing for brand name drugs had increased by 50% or more. We need to overhaul two of our most important system if we need to move ahead.. the social security act and medicare system.. both are aging and both need fresh perspectives.
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