The Changing Economics of Medical Technology (1991) / Chapter Skim
Currently Skimming:
2. The Diffusion of New Technology: Costs and Benefits to Health Care
2. The Diffusion of New Technology: Costs and Benefits to Health Care
Pages 21-34
The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.
From page 21... ...
Highly visible "big-ticket" items, such as organ transplantation, diagnostic imaging systems, and new biotechnology products attract a major share of both praise and blame. Five facts about new medical technology underlie this paper.
|
From page 22... ...
First, we review the evidence regarding the contribution of new technology to the aggregate cost of health care. Second, we review a normative model of optimal diffusion of technologies, based on evaluation of their cost effectiveness that is, the ability of a technology to improve health outcomes.
|
From page 23... ...
health care expenditures by first estimating the impact of other, more easily identifiable sources including price inflation and age-specific population growth (9,10~. The portion of the increase in health expenditures not accounted for by these explanatory variables is attributed to technology.
|
From page 24... ...
Researchers have shown that any individual technology makes a relatively small contribution to health expenditures. For example, a 1979 study found that a 50 percent reduction in the annual operating costs of four expensive technologies computed tomography, electronic fetal monitoring, coronary bypass surgery, and renal dialysis would yield savings of 1 or 2 percent of the nation's health expenditures (151.
|
From page 25... ...
The criterion for resource allocation that follows from this formulation of society's objectives is cost effectiveness: if a new technology produces health outcomes at a lower cost per unit than existing technologies, it should be adopted; otherwise, it should not. The principle is that clinical practices having low cost per unit of health benefit should have priority over practices having a higher cost per unit (17,18~.
|
From page 26... ...
Cholesterol-lowering drugs probably are not cost effective for primary prevention of coronary heart disease in patients without other risk factors (28) but may well be cost effective, or even cost saving, in patients with established coronary artery disease or multiple risk factors in addition to high serum cholesterol.
|
From page 27... ...
By devising systems with more appropriate incentives, policy makers hoped that resources, including those for new technologies, would be allocated more cost effectively. The widespread reforms of health care financing in this decade, including the adoption of the Medicare Prospective Payment System (PPS)
|
From page 28... ...
There is limited empirical evidence about the diffusion of new technologies under PPS. The Prospective Payment Assessment Commission has reported that recent years have witnessed continued growth in the number of community hospitals offering lithotripsy, open heart surgery, cardiac catheterization, and organ transplants (30)
|
From page 29... ...
An HMO's cost-effectiveness analysis regarding a new technology can be expected to discount costs, and to some extent health consequences, beyond the point of disenrollment. A second difference is that HMOs do not cover all health care services, such as stays in long-term care facilities.
|
From page 30... ...
The new fee schedule is intended to establish a "level economic playing field" for physicians based on resources used in providing services. Ideally, the effect will be to make medical decision making income neutral for the physician, leaving clinical benefit as the basis for resource allocation.
|
From page 31... ...
This country has not yet found a stable funding base for these kinds of evaluations, but this must be done to provide an adequate information base for policy formulation. Second, we must make the incentive structure facing health care insurers, providers, and consumers correspond more closely to societal goals and resource constraints.
|
From page 32... ...
National health expenditure growth in the 1980s: an aging population, new technologies, and increasing competition. Health Care Financing Review 1983;4:1-58.
|
From page 33... ...
Weinstein MC, Tosteson ANA, Goldman L Cost-effectiveness of screening strategies for left main coronary artery disease in patients with stable angina.
|
From page 34... ...
How do financial incentives affect physicians' clinical decisions and the financial performance of health maintenance organizations? New England Journal of Medicine 1989;321:86-92.
|
Key Terms
This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More
information on Chapter Skim is available.