"As health care costs continue to rise, governments and private payers are being forced to make difficult coverage decisions about new health care treatments. Cost-effectiveness (CE) analysis is the main method used to prioritize this spending. The self-evident efficiency rationale for CE is...

We use a calibrated stochastic life-cycle model of endogenous health spending, asset accumulation and retirement to investigate the causes behind the increase in health spending and life expectancy over the period 1965-2005. We estimate that technological change along with the increase in the...