To forecast mortality beyond the 10 year observation window, we assume that the mortality hazard estimated in 1997-99 prevails in all subsequent years. Making this assumption, we estimate that those not disabled in 1989 have an average life expectancy of 7.8 years while those disabled in 1989 were expected to live only another 5.1 years on average (Table 11).
The above calculation, does not account for the difference in subsequent disability in the next decade. Table 10 shows the disability rate for the 1989 cohort in the 1994 and 1999 surveys, and the disability rate for the 1994 cohort in 1999. In each case, we condition disability status on being alive at the end date. Seventy-nine percent of people who were disabled in 1989 and still alive in 1994 were also disabled in 1994, compared to 31 percent of those not disabled in 1989. This pattern repeats itself in 1999, and is true for the 1994 cohort as well.
To estimate quality-adjusted life expectancy, we interpolate disability rates between 1989 and 1994, and 1994 and 1999. In each case, we assume that disability rates change at a common rate each year of the interval. We also extrapolate disability rates after 1999 using the annual change between 1994 and 1999. As a rough approximation, we assume that 1 year in a disabled state is equivalent to 0.5 quality-adjusted life years.
As the second row of table 11 shows, quality-adjusted life expectancy is lower in each case than is life expectancy, but the difference between the disabled and non-disabled is similar to the unadjusted estimates. The increase in quality-adjusted life expectancy associated with not being disabled is 3.7 years. whitening gel
The value of this improvement in life expectancy depends on the value of a year of life. Following a substantial recent literature (Viscusi and Aldy 2003), we assume that a year of life in good health is worth $100,000 (in 1992 dollars). We also assume that future values are discounted at a 3 percent real rate of interest. Using these assumptions, we estimate the value of disability prevention to be $316,000.
These benefits need to be weighed against the cost of reducing disability. These costs have two parts. The first is the initial treatment cost that led to the reduction in disability. To measure these costs, we use data on hospitalization spending for the 1989 cohort in the year after the CVD admission9. The one year interval is relatively common in studying the acute treatment for cardiovascular disease (Cutler and McClellan 2001; Skinner, Staiger et al. 2006). The limitation to hospital costs is because only those data are reliable prior to 1991. We inflated all costs to a common year of 1992 using the implicit GDP Price Deflator (Economic Report of the President 1997). We estimate that in the year after the CVD event, hospital spending averages $8,610 for patients who do not receive relevant procedures and $16,332 for patients receiving relevant procedures.