Is Medical Research Cost Effective?: Response to Murphy and Topel

The paper explores the relationship between medical innovation and cost of treatment. The methodology used by Murphy and Topel to calculate the statistical value of a life is examined. The authors discuss possible confounding factors, such as the general trend of decreasing mortality, and consider the possibility that non-medical sources, especially the decrease in tobacco use, may explain much of the decrease in mortality rates. The authors suggest an alternative to Murphy and Topel's population-level model for assessing the benefits of medical technology, based on Lewis Thomas' categorization of three levels of technology: non-technology ("caring"), half-way technology (does not reverse or prevent the underlying problem), and high technology (preventative or curative). The categories are applied to the example of type 1 diabetes mellitus, in which quality of life and mortality improvements are clearly the result of technological changes and not behavioral modifications. The authors emphasize the cost-effectiveness of high technology, which is based on medical research advances.