Changing Medical Technology and Its Effect on Health Care Costs
MedSun: Newsletter #13, March 2007
A new paper in the Kaiser Family Foundation series Snapshots: Health Care Costs examines the ways in which changes in medical technology can affect health care costs. Health care experts frequently point to the development and adoption of medical technology as key factors in the rapid rise in health care spending in the United States. Some observers argue that new medical technology accounts for one-half or more of real long-term spending growth. Snapshots is a series of regular online publications that address the issue of national health care costs.
The term medical technology can refer to procedures, equipment, drugs, medical devices, and administrative support systems used to track patient information. The Foundation paper discusses why medical technology is considered one of the most important factors in rising health care costs. Even if an advance in medical technology is less costly than the current approach, the new technology may extend treatment to a greater number of patients or may add to rather than replace existing treatment, thus adding to overall health care costs. The paper studies some of the key factors that can influence the development and adoption of new technology, including consumer demand and insurance coverage. In addition, it raises policy issues such as whether consumers and insurers receive adequate value for money spent on new medical technologies and how medical technology costs can be contained.
How Changes in Medical Technology Affect Health Care Costs