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.