Healthcare Technology Featured Article

November 01, 2013

US Must Cope with Dilemma that Life-Saving Technology Leads to Skyrocketing Health-Care Costs



Improved technology has saved numerous lives of patients suffering from a variety of ailments and disorders. But it has also led to increasing costs of healthcare – now a major challenge facing the United States and elsewhere.

Consider just the overall costs of U.S. healthcare. Some $2.6 trillion was spent in 2010. Contrast this with $1.3 trillion spent a decade earlier. In fact, one study shows every 13 years spending on health care doubles for cost of hospitals and doctor’s offices. Jonathan Gruber, an MIT economist and researcher at the National Bureau of Economic Research, says technology has indeed led to higher costs, but it may be able to lower the costs, too, according to the International Business Times.

One recent study cited by the Hastings Center said that new or added medical technology “contributes 40–50 percent to annual cost increases.” It was argued by the Hastings study that “Controlling this technology is the most important factor in reducing them. … Cutting the use of technology will seem wrong—even immoral—to many.”

Consider too that 40 percent of Americans said in surveys they believe that medical technology can always save their lives.  “Unlike many countries, the U.S. pays for nearly any technology (and at nearly any price) without regard to economic value. This is why, since 1980, health-care spending as a percentage of gross domestic product has grown nearly three times as rapidly in the United States as it has in other developed countries, while the nation has lagged behind in life-expectancy gains,” according to a report from the MIT Technology Review authored by Dartmouth College professor Jonathan S. Skinner.

He also reported that “0.5 percent of studies on new medical technologies evaluated those that work just as well as existing ones but cost less.” There is, he says, “nearly complete isolation of both physicians and patients from the actual prices paid for treatments.”

What are his recommendations to face this dilemma?

“We should pay only for innovations that are worth it, but without shutting out the potential for shaky new ideas that might have long-term potential,” Skinner said. He cited how researchers Steven Pearson and Peter Bach want to see Medicare covering innovations for three years. “If there is still no evidence of effectiveness, Medicare would revert to paying for the standard treatment,” Skinner summarized their arguments.

The other recommendation is to better organize the health-care system. There needs to be “greater emphasis on organizational change, innovations in the science of health-care delivery, and transparent prices to provide the right encouragement. This means smartphone diagnostics, technology to help physicians and nurses deliver the highest-quality care, or even drug container caps with motion detectors that let a nurse know when the patient hasn’t taken the daily dose,” Skinner said. “The overall benefits from innovation in health-care delivery could far exceed those arising from dozens of shiny new medical devices.”

As the United States struggles with the implementation of Obamacare, concern about technology just doesn’t relate to websites offering insurance products. The nation needs to also look at technology in use at hospitals and doctor’s offices.




Edited by Stefania Viscusi




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