Prominent health care economist

Dorothy Rice, a federal economist whose research on the financial toll of illnesses and disabilities had a profound effect on health care in the United States, leading in part to the creation of Medicare in 1965 and to a more than $200 billion settlement with the tobacco industry, died Feb. 25 at a hospital in Oakland, California. She was 94.

She had recently fallen and broken a hip, said a son, Ken Rice.

The daughter of Jewish immigrants from Poland, Mrs. Rice was for many years a nationally recognized health care economist and statistician, first in government and then in academia as a professor at the University of California at San Francisco.

Rice never attended graduate school, but she developed methods of economic analysis that are still in widespread use today — and that rely on a bevy of health data that she helped bring about.

As an analyst with the Social Security Administration, Rice wrote a revelatory 1964 report that found that about half of the U.S. elderly population, or 8.5 million people, did not have health insurance. Those 65 and older who were most in need of health insurance, she noted, were also “the least likely to have it - persons in poor health, the very old, those not employed and those with low incomes.”

“Today it is inconceivable that 50 percent of the population would be uninsured,” said Karen Davis, a healthpolicy professor at Johns Hopkins University. Rice, she said, was “instrumental to the enactment of the Medicare program,” which guarantees health insurance to people 65 and older, and to its subsequent refinement through the collection of data on all aspects of health care for the elderly.

At federal health agencies including the National Center for Health Statistics, which Rice led beginning in 1976, she established new statistical standards and spearheaded studies that provide data on health expenditures across the country.

Perhaps most significantly, Rice was among the first researchers to rigorously analyze the costs that a particular illness inflicts on society, in terms of individual hospital bills and the productivity lost when a bricklayer or homemaker - is forced to take time off work.

With a colleague, Barbara Cooper, Rice became the first to place an economic value on the work of a homemaker, a job she knew well from having taken 11 years off work to raise her children.

“She looked at all the things a housewife did during the week and how many hours she spent doing it and looked at the market for each of those components,” said Rice’s brother, Thomas Rice, a health-policy professor at the University of California at Los Angeles.

“She wasn’t just taking stuff off the shelf,” her brother said. “She and Barbara Cooper were inventing solutions to problems that others hadn’t dealt with before.”

Mrs. Rice led studies on a range of ailments, including Alzheimer’s disease and AIDS - “you name a disease, I did a study on it,” she once said - and did much of her research after leaving the federal government in 1982, when she became frustrated by health-research funding cuts under the Reagan administration.

In the late 1980s, she and Wendy Max, a colleague at UCSF, began studying the cost of smoking-related illnesses, work that was crucial to a 1998 settlement between 46 states and the tobacco industry. Tobacco companies agreed to pay the states at least $206 billion over 25 years, a figure that was reached in part through calculations performed by Rice.

Stanton Glantz, a UCSF professor who studies the health effects of smoking, said Rice was unassuming but intensely dedicated to performing research that had a direct effect on people’s lives. “She was always steadfast,” he said, “putting the facts out there in a pleasant and unflappable way but not cowed by people who didn’t want to hear what she had to say.”

Dorothy Pechman was born in Brooklyn on June 11, 1922. Her father was a tailor and a first cousin of her mother, a homemaker. Neither parent graduated from high school.

Rice studied at Brooklyn College for a year and a half before her older brother suggested she transfer to the University of Wisconsin at Madison, where he had been awarded a $2,000 fellowship - enough money to support the two of them, he said.

She took him up on the offer, later describing her move to Madison as “the best thing that ever happened to me.” She studied labor economics under Edwin Witte, one of the fathers of Social Security, and took statistics courses under Milton Friedman, the free-market economist. She graduated in 1941 and moved to Washington, where she worked as a statistical clerk for the Labor Department and other federal agencies before the birth of her children led her to place her career on hold in 1949.

Rice was undaunted by critics, mostly male, who thought women were more suited to typing than to economic analysis. (”I never took typing,” she said in a 2004 oral history, “because I didn’t want to be a typist.”) “She never said anything about a glass ceiling,” Max recalled. “She saw it as an opportunity. The sky was the limit if you were smart and knew how to go about things.”

Health statistics — patient totals, median costs and even average wait times — seemed ever on her mind. Years before Rice broke her hip while at home in Oakland, she suffered the same injury in Washington, D.C., while preparing for a speech on health care.

The wait time for a D.C. Fire Department ambulance, she told The Washington Post in 1978, recovering in her hospital bed, was far too long: “At least a half-hour, which surprised me very much.”