The research contributions in health economics that have been summarized at this symposium are remarkable for the sheer quality of their science as well as for their creativity, breadth, and social impact.  It is humbling for someone who is not a health economist to watch this amazing parade of research findings.  It is also a huge testament to the role of the NIH in supporting the work of health economists, through different institutes and over the course of several decades.  With that support, economists have been able to study, and contribute to, extremely important health policy questions.  I would like to reflect briefly on how NIH funding affected the course of economics research and why the field of economics responded so readily and so well to NIH support.

In the mid-1980s, the NIH, and in particular NIA, made a major commitment to bringing economics into the study of health-related events over the life-course and to the analysis of the health and well-being of older Americans. Richard Suzman was the visionary program officer who played a key role in this initiative.

There were two things about NIH’s support for economics that were really important and contributed to its success.  The first was its sustained commitment.  It was clear that NIA support would be a multi-year venture.  That was reflected in grants that lasted longer than those from many other funders of economics.  The NIH recognized that the problems being studied needed attention not just for a few years but potentially for decades.  The second was that NIH committed a level of research support commensurate with the importance of the problems being studied.  The result was an exciting dynamic between research support and high quality research output that generated remarkable advances in both the level and quality of research in health economics.

The availability of NIH funding shifted the research agenda in economics, and it transformed the talent pool of economists who are concerned with health care and health outcomes.  In the 1970s, health economics was a small field, a bit disconnected from the core of economics.  Kenneth Arrow’s seminal 1963 paper on medical care made it, in the words of pioneering health economist Vic Fuchs, respectable to study health issues.  But the group of researchers pursuing these topics was still limited.  That has changed!  Today, many leading economists work on health topics, and top economics departments turn out substantial numbers of health economists. Several Nobel laureates, including Angus Deaton, James Heckman, Dan McFadden, and Alvin Roth, have been supported by NIH and carried out important health-related research.  Leading economists now publish in the top medical journals, and their work is very well received – the recent JAMA paper on mortality differences across income groups, and the NEJM paper describing the findings of the Oregon Health Insurance experiment are examples.  These changes are very tangible consequences of the support that NIH has provided to economic researchers.  Many economists are now eager to convey their findings to the readers of medical and scientific journals.

The timing of NIH’s decision to ramp up support for economists was fortunate.  Economics had a framework that was well-positioned to support research on health over the life course.  Dynamic lifecycle models emphasize that late-life health and well-being depend on experiences, choices, and shocks that affect individuals from before birth, through childhood, over the prime working years, and into retirement.  NIH made it possible to study the detailed impact of shocks that move an individual from one to another trajectory – addiction, a mental health issue, or a chronic health limitation.  Lifecycle modeling rose in importance within economics because it provided the tools to investigate these health-related topics, and because the various NIH institutes stood ready to support research on each part of this trajectory.

NIH support for economics has not only affected the research questions that economists study, but it has also affected the way economists conduct research.  Let me highlight several changes.

NIH promoted and supported team science

For decades before it began to fund economics research, the NIH had been supporting team science. Historically, economics was a “small team” field.  My colleague Robert Solow once noted that “the most powerful engine for economics research is the lone faculty member with his or her graduate or undergraduate research assistant.”  Over the last three decades the conduct of research has evolved, especially in empirical economics, toward larger research teams. With such teams has come a capacity to address larger problems.  In many respects, economists learned how to do team science because of the resources provided by NIH.

NIH helped introduce post-docs into economics

NIH was an early supporter of post-docs in economic research, and this support had a transformative effect.  Three decades ago, accepting a post-doctoral position was usually the result of an unsuccessful job market search on the part of a new Ph.D.  No longer.  Today, newly-minted economists face an increasingly dense network of post-docs, and students at the very top of the market compete aggressively for them.  The change took place when new graduates realized that two years of unrestricted research time just after completing the Ph.D. was a great way to develop their research program and to launch their career.  NIH funding for postdocs was very important in making this shift.

NIH has enriched the data environment

Historians of science teach us that new tools beget new discoveries.  The NIH played a critical role in tool development in spearheading the creation of the Health and Retirement Study (HRS), and in funding the data collection for more than two decades.  The effects of this data collection effort has been remarkable.  It has resulted in more than 3700 journal publications and nearly 500 dissertations.  It has also provided a model for how to develop critical data resources, in health economics and in other fields.  Because from the outset the HRS steering committee asked researchers from a number of disciplines “what is needed in your field?” and then went into the field and collected the data, there was always a network of researchers ready to translate HRS data to published journal articles.

The HRS has also provided a venue for promoting cross-discipline collaboration.  NIH program officers often pushed economists to work with researchers outside their field; the most extreme example would be encouraging clinicians and economists to tackle key questions together.  That collaboration did not come naturally to economists, but it certainly has been very productive in advancing knowledge.  One significant benefit of this collaboration is that as clinicians have interacted with economists, they have realized that even though economists are never going to invent a medical treatment, their insights can affect health outcomes by facilitating behavioral change, by making care accessible to patients through the design of health insurance plans, and by providing empirical evidence that can bear on treatment design.

Has economic research affected health care delivery and health care policy?

It is much more difficult to assess how health economics has affected the delivery of health care and the design of health care policies than to identify ways in which NIH has supported and shaped the growth of health economics. Economists’ greatest impact may be changing the framework, and the vocabulary, that is used to discuss the central issues in health policy.  Economists have brought their expertise in evaluating tradeoffs, and in assessing the outcomes of treatment strategies, to bear on a range of health policy issues in the public and private sector.  There are very large potential benefits from improving decision-making and policy design in a sector that accounts for more than a sixth of GDP and affects everyone in their role as a health care consumer.  The NIH deserves and should claim credit for bringing economic insights to prominence in the health care field.

 For a video of the full symposium, please see https://videocast.nih.gov/launch.asp?23495