Cutler monitors the vital signs of U.S. health care system

By Alvin Powell

Contributing Writer

David Cutler is probing the inner workings of the nation's health care system, using the tools of economics to tackle problems with social and political ramifications.

Cutler, one of Harvard's newest tenured economics professors, worked in Washington, D.C., during the 1993 debate over national health care reform. He began this research after seeing firsthand how little data exist on how well the system works.

"The health care system is immense, but we have very little idea of what we get out of it," he said.

Cutler's work in health economics has made him stand out and was a factor in his promotion last July to professor of economics in the Faculty of Arts and Sciences. At 32, Cutler is among the youngest professors in the Department, according to Jeffrey Williamson, the Laird Bell Professor of Economics and chairman of the Economics Department.

Cutler is among the pioneers in a rapidly growing field, and he is setting the agenda for future researchers.

"David is viewed as a leader in his generation exploring the

economic mysteries of that important sector," Williamson said. "He has a wonderful mix of policy exposure, research maturity, and theoretical skills. It is very unusual to find all three in one person."

Cutler has embarked on a study of the health care system's cost and effectiveness, a massive undertaking, he said, which could stretch out another 10 to 15 years.

He recently looked at heart attacks among Medicare patients between 1984 and 1991. He found the cost of treating heart attacks rose $4,000 during that time, and that heart attack victims lived an average of eight months longer in 1991 than they did in 1984.

Most people would find the investment well worth it, an indication that at least that part of the health care system is working, he concluded.

Although he is looking at health care through an economist's eyes, Cutler stresses that any reforms must be made after considering the social, political, and moral factors. A pure economic analysis might find a procedure too costly, but that cost might be something society feels is morally important to bear.

"If you think only as an economist, you'll produce silly answers," he said. "And if you don't consider economics at all, you'll also produce silly answers."

From Dinner Table to Doctorate

Born in Cleveland, Ohio, Cutler grew up in Los Angeles with parents who loved to discuss thorny public policy issues at the dinner table -- discussions that he found stimulating.

He received a bachelor's degree in economics from Harvard in 1987 and a doctorate in economics from M.I.T. in 1991. Health insurance premiums were skyrocketing during those years, fueling a national debate about health care policy. It was partly that debate that piqued his interest in health economics, he recalled.

"It's always been fascinating to me to say, 'Here's an immense public policy problem that affects a lot of people, what should government do about it?'" Cutler said.

Cutler was an assistant professor of economics at Harvard from 1991 to 1995, when he was named the John L. Loeb Associate Professor of Social Sciences. He took a leave in 1993 to serve as senior staff economist at the Council of Economic Advisors and director of the National Economic Council in Washington. It was during that year that he worked on President Bill Clinton's health care reform efforts.

Cutler said his experience in Washington proved invaluable. He left with a sense of how little people really knew about the effectiveness of the nation's health care system. On other problems, such as the national budget deficit, people basically agreed on what had to be done, even though they disagreed on how to do it. However, he found there was no similar consensus with health care, partly because there weren't enough facts to make a convincing case for any option.

"I brought back a lot of questions and a sense that the public debate was not really refined," Cutler said. "We all thought we had answers, but when it came time to convince people, we couldn't. The groundwork wasn't there."

His experience in government gave him a direction in which to focus his research. After returning to Harvard, he began looking into how well the health care system really works.

Cutler's teaching duties sometimes spur his research by sending him searching for examples to illustrate points in his lessons.

He enjoys showing students how to use seemingly dry economic theories to solve real-world problems. With his graduate students, he said, he tries to emphasize not what is known about health economics, but what is not known.

Cutler called his appointment as professor "a terrific honor" and said it is a confirmation that the work he values highly is appreciated by others.

"It's a wonderful feeling to find the things I care about are things others also care about," he said. "It's also terrific because I love being here and working with such fine students and colleagues. It's a wonderful place to be."