Health Care.

• Position: Bureau News

The NBER's Program on Health Care met in Cambridge on May 7. NBER Research Associate Dana Goldman, RAND Corporation, organized this program:

Paul Gertler, NBER and University of California, Berkeley, and Tim Simcoe, University of California, Berkeley, "Disease Management: Exploiting Standards and Information Technology to Improve Health-Care Productivity" (presented at the Universities Research Conference described earlier in this issue)

Mark Duggan and William Evans, NBER and University of Maryland, "Lifetime Medical Costs of Treating HIV Patients on Medicaid"

Jay Bhattacharya, NBER and Stanford University, and Darius Lakdawalla, NBER and RAND Corporation, "Time-Inconsistency and Welfare"

Frank R. Lichtenberg, NBER and Columbia University, "The Expanding Pharmaceutical Arsenal in the War on Cancer" (NBER Working Paper No. 10328)

William H. Dow, NBER and University of North Carolina, and Michael D. Hurd, NBER and RAND Corporation, "Medicare as Valued by Recipients"

During the last decade, annual mortality rates for AIDS patients in the United States have declined by more than 75 percent. Duggan and Evans estimate the contribution of new drug treatments to this decline and to changes in health care spending, using more than ten years of claims and eligibility data for a sample of 12,152 HIV-positive Medicaid recipients from the state of California. Medicaid recipients are a natural group to examine given that approximately half of individuals with AIDS in the United States are on this program. The findings here indicate that the introduction of Epivir (a nucleoside reverse transcriptase inhibitor or NRTI) and protease inhibitors in late 1995 explain virtually all of the mortality improvement during the past decade. The increase in life expectancy coupled with the sharp increase in the average price of HIV antiviral drugs has led to a 3500 percent increase (from less than $5000 to approximately $175,000) in the present value of lifetime HIV drug spending.

Self-control devices--such as rehabilitation programs, group commitment, and informal fines--can make time-inconsistent smokers better off. Health economists have used this result to argue in favor of cigarette taxes that restrain smoking. However, taxes alone are not Pareto-improving overall, because they benefit today's smoker at the expense of future smokers, who have less demand for self-control. Bhattacharya and Lakdawalla suggest an alternative class of taxation policies that provide...