We All Want Longer, Healthier Lives. But It's Going to Cost Us.

Medicare, the federal government's insurance program for the elderly and disabled, provides an especially dramatic snapshot of health care's growing claim on our wealth and labor. In 1970, Medicare was 0.7 percent of GDP -- 70 cents of every $100 the country produced. By 2005, it was 2.7 percent. Last year, it was 3.2 percent, according to the Medicare trustees' annual report. In 2082, the program is projected to be 10.8 percent of GDP. Over the past half-century, total federal income tax receipts have averaged 11 percent of GDP per year. So unless something changes, in about 75 years, Medicare alone will cost as much as the sum of all our federal income taxes.

This kind of growth doesn't come just from jacked-up prices, a bureaucratic and inefficient delivery system or increasing numbers of sick and old people. Something else has to be going on to explain such steady, predictable, relentless growth.

That something is innovation. Various health economists have estimated that somewhere between 40 and more than 65 percent of the growth in per capita health care spending since 1940 can be attributed to advances in medical care. Each year, there's more that can be done and more that's judged worth doing.

And the effect has been profound. Consider heart disease, the leading cause of death in the United States. From 1980 to 2000, deaths from heart disease fell 40 percent. If the 1980 death rate from heart attacks had held in 2000, about 342,000 more Americans would have died in that year alone. A team of researchers recently calculated that 47 percent of those lives were saved by better medical care -- involving such developments as clot-dissolving drugs, coronary stents and medicines to prevent congestive heart failure. About 44 percent were saved because people had reduced their risk factors -- quit smoking, lowered their cholesterol and gotten their blood pressure under control, with many of those improvements also the effect of better drugs and medical care.

Two years ago, another group of researchers, led by Harvard economist David M. Cutler, looked at the money spent on health care from 1960 to 2000 and asked the crucial question: What did it get us? Their answer: Plenty -- but improvements are costing more all the time.

Their study found that over those 40 years, the life expectancy of people of all ages had increased. Not surprisingly, investments in the health of children were more cost-effective than investments in 60-year-olds. What's more interesting is that extending life cost more as the 20th century progressed, even taking inflation into account. In the 1970s, it took $46,870 to add a year to the life expectancy of 65-year-olds. By the 1990s, it cost $145,000.

As we become healthier, it takes more effort to extend our lives than it did in a time when we were less healthy (and dying prematurely). Fifty years ago, American medicine picked the low-hanging fruit of life-extension as clean water, vaccines, antibiotics, insulin and other cheap innovations became available to everyone. Now, we're going after the higher and more expensive stuff.

Take implantable cardioverter-defibrillators, or ICDs. These "ambulances in the chest" shock hearts out of the fatal rhythms that are a major hazard for people who survive large heart attacks. Vice President Cheney has one wired into his heart.

Three years ago, a team of researchers calculated that putting an ICD into a heart-attack survivor added one to three years to the person's life expectancy. The cost? Between $30,000 and $70,000 for every year of life gained. In the world of "cost-effectiveness analysis," that's judged to be worth it, the convention being that a treatment that buys an extra year of life for $50,000 or less is "affordable."

Medicare estimates that about 500,000 Americans now qualify for an ICD on medical grounds. Undreamed of when our parents and grandparents were having heart attacks, these devices are keeping or will keep thousands alive. Sowho's going to give one up in the interest of slowing the growth of health care spending? Not I. And I suspect not you, either.

Of course, there are ways to save money.

Administrative costs consume 24 percent of health care spending, according to one often-quoted estimate. Establishing a more unified health care system could probably cut that in half. There is also tremendous regional variation in medical care in the United States, so bringing everybody into line will reduce costs.