The Office of Management and Budget's Peter Orszag tells us that the growing costs of our ailing health care system present the greatest long-term threat to the U.S. budget deficit. In the context of on-going economic, energy, and foreign affairs crises, such a claim should be loud enough to wake up the political sideliners and health reform obstructionists who assume or hope our country's health care crisis will somehow fix itself.
For those afraid that cost control necessitates government suffocation of technology innovation and "rationing" of valuable care, today's Health Populi post highlights a recent NEJM article (Fisher et al., 2009;NEJM 360(9):849-852) that promotes a more optimistic view of the road to affordable, universal health care. The study compares vastly different growth rates in per capita Medicare expenditures among U.S. cities with, presumably, equal access to medical technology. Instead of blaming technology for increased cost growth from 1992 to 2006 in cities like Miami, FL (5.0%) and East Long Island, NY (4.0%) versus that in Salem, OR (2.3%), the authors found that regional differences were highly correlated with differences in physician propensity to recommend discretionary services in clinical "gray areas" (e.g., subspecialist referrals for common, low-risk symptoms such as typical gastroesophageal reflux). Because increased expenditure growth from city to city fails to correlate with any measure of improved health, the take-home message of the report is that comparative studies between high-cost, high-growth regions and low-cost, low-growth regions can influence policy that encourages the former to behave more like the latter, without reasonable fear of a subsequent fall in care quality and health.
The regional differences in health care cost efficiency have been noted before - see, for example, 2006 papers by David Cutler ("Making Sense of Medical Technology") and Jonathan Skinner et al. ("Is Technological Change in Medicine Always Worth It?"). However, the important data uncovered by the recent NEJM article indicate that "technology" and "payment systems" are insufficient explanations of regional spending differences, as all populations in the study have access to the same technologies, and are all in the fee-for-service system). What the study does not analyze is correlation of regional spending with other factors, such as prevalence of medical malpractice reports, physician work-load, patient education, or other information that might provide explanations for regional differences in physician behavior. And with these and other unknown cost-of-care determinants comes the necessity of government help.
Individual physician leadership in medical practices, communities, and the broader health care system will go a long way in improving the efficiency of care, but without data-driven guidelines based on comparative cost-efficacy measurements, there can be no unified progress toward improved, affordable care. Physicians and policy makers can work together to assure the right information is collected and properly acted upon. But, ultimately, if we wish to provide sustained, quality, universal care, we need fundamental and comprehensive payment reform through which payers and providers are accountable for costs, but incentivized to keep more patients healthy.
Friday, February 27, 2009
Wednesday, February 25, 2009
Technology in Health Care: Reconsidering the "Wasteful" and "Unnecessary"
I think it's time for expert and amateur commentators of health care reform to get more specific about "wasteful" and "unnecessary" health care spending. What, exactly, is waste in the context of human care? Where do we find it? How do we extract it from our health system? Medical care is currently too expensive to achieve high-quality, universal care, so there is little doubt among reputable economists and health policy experts that overall cost reduction must accompany efforts to expand coverage and accessibility. Fortunately, the Obama Administration's first steps toward health care reform suggest an understanding that science and technology are not necessarily the sources of "wasteful" or "unnecessary" care, but rather the tools with which we can increase efficiency of care and reduce costs.
Medical technology is often identified as a primary source of overspending in our health care system because it is estimated to have contributed to 50% of recent growth in health care spending. A problem here is that the growth in health care spending has become synonymous with the excessive and the wasteful in health care spending. Economists and other commentators argue that we must cut out unnecessary costs by targeting the drivers of cost growth. This is faulty logic that, if acted upon, could be disastrous. Viewing the progress of innovative technologies under this lens of cost reduction is precisely upside-down. Not only do attempts to control adoption and use of innovative medical technology carry severe, unintended consequences for the overall quality of health care, but incentive-directed technological innovations, directed toward hospital and physician care cost reduction, can substantially reduce overall costs in the near-mid-term, while assuring improved quality in the long-term.
Technological innovation is inseparable from the cost-coverage trade-off in health care because it plays a common role in comprehensive data collection and efficient information consolidation and management; together, these lead to systemic cost control and allow sustainable expansion of coverage. President Obama's early action to invest in the collection and management of health data and information is an important first step in moving medical care to a more efficient, precise process that is better for payer, provider, and patient.
Medical technology is often identified as a primary source of overspending in our health care system because it is estimated to have contributed to 50% of recent growth in health care spending. A problem here is that the growth in health care spending has become synonymous with the excessive and the wasteful in health care spending. Economists and other commentators argue that we must cut out unnecessary costs by targeting the drivers of cost growth. This is faulty logic that, if acted upon, could be disastrous. Viewing the progress of innovative technologies under this lens of cost reduction is precisely upside-down. Not only do attempts to control adoption and use of innovative medical technology carry severe, unintended consequences for the overall quality of health care, but incentive-directed technological innovations, directed toward hospital and physician care cost reduction, can substantially reduce overall costs in the near-mid-term, while assuring improved quality in the long-term.
Technological innovation is inseparable from the cost-coverage trade-off in health care because it plays a common role in comprehensive data collection and efficient information consolidation and management; together, these lead to systemic cost control and allow sustainable expansion of coverage. President Obama's early action to invest in the collection and management of health data and information is an important first step in moving medical care to a more efficient, precise process that is better for payer, provider, and patient.
Outlining a Case for Health Technology Innovation
Introduction
The unsustainable growth of U.S. health care costs and uninsured individuals is well documented [1-4], and is a harbinger of a health system crisis that could prolong economic distress, leave unprecedented numbers of Americans unhealthy and uncared for, and bring our country to its highest levels of vulnerability in modern history. Approximately 20,000 Americans die every year because they lack health insurance, and the percentage of our population without insurance is growing at twice the rate of the overall population growth [5]. Nearly 50 million Americans are currently uninsured, and by 2030, the rising cost of Medicare will crowd out all other federal government spending except defense [6,7]. But the American people are ready for change. They now know, first-hand, that the United States is not immune to systemic failure, that real problems require timely solutions, and that fear does not justify irresponsibility or shield us from its consequences. For the first time since the inception of Medicare and Medicaid in 1965, we are powerfully aligned for reform. How we integrate the development of data collection and innovative medical technologies into our plan will determine its eventual success.
Cost vs. Coverage and the Role of Innovation
Appreciation of cost-coverage trade-offs in our health care system is central to any reform effort [12]. America’s appetite for medical technology is estimated to account for 50% of the observed growth in health care costs [2,9], and, therefore, is a target for cost-control efforts [e.g., 10]. Health care economists targeting medical technology focus on assessing “efficiency” and determining cut-off values below which a medical intervention is considered “wasteful.” However, these efforts largely fail to confront the unclear methodology and ethical ambiguity concerning “waste” determination in the context of patient care [11], studies suggesting that investment in medical technology provides good value on average [4], and data indicating that growth in prescription drug spending has decreased since 2003 [12]. Moreover, such approaches antagonize the medical technology industry and raise concern among citizens who fear losing access to interventions that are clinically meaningful despite “waste” or “inefficiency,” creating serious resistance to political efforts at reform.
Certainly, medical technology contributes substantially to the growth in health care costs, and there is room for improvement in medical technology diffusion and its cost-benefit profile. Viewing the progress of innovative technologies under this lens of cost reduction, however, is precisely upside-down. Not only do attempts to control adoption and use of innovative medical technology carry dire consequences for the overall quality of health care, but incentive-directed technological innovations, directed toward hospital cost reduction, can substantially reduce overall costs in the near-mid-term, while assuring improved quality in the long-term. Technological innovation is inseparable from the cost-coverage trade-off in health care because it plays a common role in comprehensive data collection and efficient information consolidation and management; together, these lead to systemic cost control and allow sustainable expansion of coverage. This paper focuses on the role of innovation in reducing hospital and health professional expenditures, with specific reference to disruptive medical technologies and the importance of health information technology and comparative effectiveness in accelerating cost
control. By investing in innovative medical technology in the ways discussed below, we will be able to identify particularized needs of larger segments of patients and route them to the resources that would offer the best and most cost-effective treatment, thereby reducing costs, improving quality of care, and creating a sustainable path toward universal coverage.
Cost-Reduction Applications of Technological Innovation
Improved diagnosis is a particularly important application of innovative technology with cost-saving sequelae. Misdiagnosis alone contributes to massive, avoidable health care costs. Advances in diagnostics lead to increased treatment efficacy, but also allow diffusion of common care of acute, manageable disease away from expensive hospital systems and toward clinics, doctors’ offices, and eventually to patients’ homes [13]. This frees hospitals to focus on processes that maximize the value of a doctor’s specialized training and skill set. David Cutler and colleagues note that “the national focus on the rise of medical spending should be balanced by attention to the health benefits of this increased spending” [4]. Although increases in medical spending have generally provided “good value,” spending increases in care for the elderly and the chronically ill has yielded smaller “years of life” gains. Such differences can be largely accounted for when the competencies of the modern hospital with respect to the patient population is considered: hospitals and their associated professionals are adept and efficient at highly-specialized problem-solving and acute procedure performance, but are terribly inefficient with respect to care for elderly or chronically ill patients. The ability of technological innovation to facilitate transfer of chronic care to settings capable of more efficient patient management is worthy of attention and concerted action.
Information technology plays a complementary role in its ability to reduce hospital and overall health system administrative costs, allow for more comprehensive and continuous patient monitoring, and increase clinical trial efficiency. The estimated cost savings of converting medical claims-related transactions from paper to digital carry an estimated cost savings of $30 billion [14]. More importantly, the transition to electronic health records, with recent support in the American Recovery and Reinvestment Act, takes a step toward continuous patient care, from birth to death, at a level of quality not possible with paper records. Going one step further, the combination of medical data and appropriate technology innovations allows medical professionals to progress from data and information that inform empirical or evidence-based decisions, to knowledge and intelligence that lead to the best possible care.
Comparative effectiveness is an important part of the new administration’s health care policy, and is absolutely necessary to achieve the best possible care for all Americans. Our culture of medical care must embrace data-driven medical decisions, because there is no meaningful patient and physician choice if neither is fully informed of the actual, empirical efficacy of available treatments. The work of Don Berwick at the Institute for Healthcare Improvement provides promise that physicians and their patients, armed with comparative
performance data, can work together to improve quality of care [15]. A major challenge in quality comparison analyses is how to properly use the data collected. Heterogeneous patient populations and complex disease profiles make it difficult to compare the overall effectiveness of therapeutic interventions. Today there are eighty-nine varieties of leukemia and lymphoma, compared with only five known types fifty years ago [13]. Similarly, diabetes is now understood to be a collection of related disorders, and not the single disease it was believed to be decades ago. Inflammatory bowel disease was assumed by a previous generation of physicians to be a psychiatric disorder. Each of these cases warns that partial understanding of a disease, or group of similar diseases, can undermine our attempts to assess treatment effectiveness and measure its value. Better health information technology and continued development of innovative diagnostics will improve understanding of disease and patient responses to treatments, and, therefore, increase the disease populations to which comparative effectiveness data can be intelligently applied.
Hospital Care Expenditures
Hospital care and physician and clinical service expenditures comprise over 50% of the nation’s total health care costs. Though an increasing portion of hospital care dollars are spent on technology that has yet to undergo cost-benefit assessment, substantial hospital expenditures result from high-volume or high-cost procedures that could be done equally effectively or better, but cheaper, with increased investment in innovative technologies [see 16]. Further hospital care spending increases are due to increased demands of hospital management of prevalent chronic diseases that hospitals are ill-equipped to provide. For instance, obesityrelated disorders are, in most cases, better managed by a reinforced primary care infrastructure before they result in acute emergency response or chronic care at the hospital level. A physician’s obligation to her patients and to her profession’s ethical codes, in many cases, drives her to proceed with a less-thanoptimal test or intervention so long as it is safe, even if there is questionable likelihood of it yielding important medical information. Given present understanding of human disease, the development of innovative technology to address the above hospital care challenges is a more feasible way to address growing health care costs than are efforts to convince or mandate physicians to avoid “wasteful” medical interventions. Instead, incentivizing academic researchers and start-up companies to develop lower-cost ways to achieve the goals of common, high-volume hospital procedures outside of the hospital leads to sustainable cost-saving at the hospital level, and immediate job creation at the start-up company level. Coupling this initiative with the development of technology that improves diagnostic methods, data collection and management as discussed above will help shift management and treatment of certain patient segments away from hospitals to other areas of the health care system where they are better and more cost-effectively served.
Criticisms of Technology-Aided Cost Reduction
Economist Henry Aaron claims that “rapid scientific advance always raises expenditures, even if it lowers prices” [17]. Indeed, history is replete with examples of massive technological advance that drive total outlay increase despite lowering cost (e.g., automobiles, airplanes, television, computers); the cost per capita is reduced, but overall expenditures increase because of essentially infinite increase in new adopters. Health care technology can defy this rule for several reasons. First, individuals contribute to health care expenditures regardless of their insurance status, in the form of taxes, reduced income, and higher prices [18]. The precise goal in providing universal health care, therefore, is to reduce the overall cost per person, which would simultaneously reduce overall expenditures. Second, while new medical technologies sometimes do introduce complements to what already exists, more often they replace entire sets of older methods, or procedures, or technologies, pruning out less effective, more expensive predecessors and/or obviating the need for multiple, serial intervention attempts. Examples from the care of diabetes and breast cancer demonstrate that such innovations tend to move a field from highly variable intuitive medicine to more efficient precision medicine [13,19]. Moreover, typical examples of technologies that drive expenditure increase in medicine (e.g., cardiovascular disease interventions) are innovations that meet significant need; though these exceptions do increase overall expenditures, addressing our cost problem by ex ante impeding development of life-saving or life-improving technology is both politically and practically unfeasible. Finally, advances in health care technology can reduce the uncertainty or volatility of the diagnostic/therapeutic process to maximize the value of health professionals’ time. Thus, though a novel technology, in an isolated context, might increase expenditures, it can still drive overall cost reduction in a clinical setting by minimizing demands on expensive health professionals.
Conclusion
The role of science and technology innovation in health care reform is crucial to successful efforts to improve the accessibility and affordability of health care without compromising immediate and future quality. The recent American Recovery and Reinvestment Act will provide $15 billion for basic science and $50 billion to upgrade America’s technology infrastructure, which will work immediately to provide jobs and a foundation for a stabilized economy. Equally importantly, it will help facilitate discoveries that will address human health problems. This commitment toward health science innovation must remain strong in the battle for health care reform. The movement for a stronger health system is fueled by the conviction of committed leadership and a motivated constituency, a sound intellectual agenda, and the necessary call for shared responsibility. Technological innovation will continually change health care definitions, mores, and ideas of how it is best delivered [20]. Accepting the responsibility of universal coverage and the value of information collection, analysis, and distribution will take us steps closer to the next revolutionary health care reform.
References
1. National Health Expenditures Accounts. Baltimore: Centers for Medicare and Medicaid
Services, 2005.
2. Newhouse JP. Medical Care Costs: How Much Welfare Loss? J Econ Perspect 1992; 6:3-29
3. Bodenheimer T. High and Rising Health Care Costs. Part 1: Seeking an Explanation. Ann
Intern Med 2005; 142:847-854.
4. Cutler DM, Rosen AB, Vijan S. The Value of Medical Spending in the United States, 1960-
2000. NEJM 355(9):920-927.
5. Cutler DM, Wilensky GR. Perspective Roundtable: Health Care in the Next Administration.
NEJM 2008; 359(15):1-16.
6. Health Care Costs: A Primer, Kaiser Family Foundation, August 2007.
7. David Walker, 60 Minutes interview. July 8, 2007
(http://www.cbsnews.com/stories/2007/03/01/60minutes/main2528226.shtml)
8. Emanuel EJ. The Cost-Coverage Trade-Off. JAMA 2008; 299(8):947-949.
9. Cutler DM, McClellan M. Is Technological Change in Medicine Worth It? Health Affairs
2001; 20(5):11-29.
10. Bodenheimer T. High and Rising Health Care Costs. Part 2: Technologic Innovation. Ann
Intern Med 2005; 142:932-937.
11. Aaron, HJ. Waste, We Know You Are Out There. NEJM 2008; 359(18):1865-1867.
12. Aitken M, Berndt ER, Cutler DM. Prescription Drug Spending Trends in the United States:
Looking Beyond the Turning Point. Health Affairs 2009; 28(1):w151-w160.
13. Christensen CM, Grossman JH, Hwang J, The Innovator’s Prescription (New York:
McGraw Hill, 2009).
14. U.S. Healthcare Efficiency Index. http://ushealthcareindex.com.
15. Gawande A, Better (New York: Picador (Henry Holt and Company), 2007).
16. Wells PNT. Can Technology Truly Reduce Healthcare Costs? IEEE Engineering in
Medicine and Biology Magazine. January/February, 2003.
17. Aaron HJ. The Unsurprising Surprise of Renewed Health Care Cost Inflation. Health Affairs
2002. Suppl Web Exclusives:W85-87.
18. Emanuel EJ, Fuchs VR. Who Really Pays for Health Care? JAMA 2008; 299(9):1057-1059.
19. Hwang J, Christensen CM. Disruptive Innovation in Health Care Delivery: A Framework for
Business-Model Innovation. Health Affairs 2007; 27(5):1329-1335.
20. Aaron HJ. The Pitfalls of Overreaching in Health Reform. Health Affairs 2009; 28(2):w184-
187.
21. Centers for Medicare and Medicaid Services (2006), Office of the Actuary, National Health
Statistics Group.
The unsustainable growth of U.S. health care costs and uninsured individuals is well documented [1-4], and is a harbinger of a health system crisis that could prolong economic distress, leave unprecedented numbers of Americans unhealthy and uncared for, and bring our country to its highest levels of vulnerability in modern history. Approximately 20,000 Americans die every year because they lack health insurance, and the percentage of our population without insurance is growing at twice the rate of the overall population growth [5]. Nearly 50 million Americans are currently uninsured, and by 2030, the rising cost of Medicare will crowd out all other federal government spending except defense [6,7]. But the American people are ready for change. They now know, first-hand, that the United States is not immune to systemic failure, that real problems require timely solutions, and that fear does not justify irresponsibility or shield us from its consequences. For the first time since the inception of Medicare and Medicaid in 1965, we are powerfully aligned for reform. How we integrate the development of data collection and innovative medical technologies into our plan will determine its eventual success.
Cost vs. Coverage and the Role of Innovation
Appreciation of cost-coverage trade-offs in our health care system is central to any reform effort [12]. America’s appetite for medical technology is estimated to account for 50% of the observed growth in health care costs [2,9], and, therefore, is a target for cost-control efforts [e.g., 10]. Health care economists targeting medical technology focus on assessing “efficiency” and determining cut-off values below which a medical intervention is considered “wasteful.” However, these efforts largely fail to confront the unclear methodology and ethical ambiguity concerning “waste” determination in the context of patient care [11], studies suggesting that investment in medical technology provides good value on average [4], and data indicating that growth in prescription drug spending has decreased since 2003 [12]. Moreover, such approaches antagonize the medical technology industry and raise concern among citizens who fear losing access to interventions that are clinically meaningful despite “waste” or “inefficiency,” creating serious resistance to political efforts at reform.
Certainly, medical technology contributes substantially to the growth in health care costs, and there is room for improvement in medical technology diffusion and its cost-benefit profile. Viewing the progress of innovative technologies under this lens of cost reduction, however, is precisely upside-down. Not only do attempts to control adoption and use of innovative medical technology carry dire consequences for the overall quality of health care, but incentive-directed technological innovations, directed toward hospital cost reduction, can substantially reduce overall costs in the near-mid-term, while assuring improved quality in the long-term. Technological innovation is inseparable from the cost-coverage trade-off in health care because it plays a common role in comprehensive data collection and efficient information consolidation and management; together, these lead to systemic cost control and allow sustainable expansion of coverage. This paper focuses on the role of innovation in reducing hospital and health professional expenditures, with specific reference to disruptive medical technologies and the importance of health information technology and comparative effectiveness in accelerating cost
control. By investing in innovative medical technology in the ways discussed below, we will be able to identify particularized needs of larger segments of patients and route them to the resources that would offer the best and most cost-effective treatment, thereby reducing costs, improving quality of care, and creating a sustainable path toward universal coverage.
Cost-Reduction Applications of Technological Innovation
Improved diagnosis is a particularly important application of innovative technology with cost-saving sequelae. Misdiagnosis alone contributes to massive, avoidable health care costs. Advances in diagnostics lead to increased treatment efficacy, but also allow diffusion of common care of acute, manageable disease away from expensive hospital systems and toward clinics, doctors’ offices, and eventually to patients’ homes [13]. This frees hospitals to focus on processes that maximize the value of a doctor’s specialized training and skill set. David Cutler and colleagues note that “the national focus on the rise of medical spending should be balanced by attention to the health benefits of this increased spending” [4]. Although increases in medical spending have generally provided “good value,” spending increases in care for the elderly and the chronically ill has yielded smaller “years of life” gains. Such differences can be largely accounted for when the competencies of the modern hospital with respect to the patient population is considered: hospitals and their associated professionals are adept and efficient at highly-specialized problem-solving and acute procedure performance, but are terribly inefficient with respect to care for elderly or chronically ill patients. The ability of technological innovation to facilitate transfer of chronic care to settings capable of more efficient patient management is worthy of attention and concerted action.
Information technology plays a complementary role in its ability to reduce hospital and overall health system administrative costs, allow for more comprehensive and continuous patient monitoring, and increase clinical trial efficiency. The estimated cost savings of converting medical claims-related transactions from paper to digital carry an estimated cost savings of $30 billion [14]. More importantly, the transition to electronic health records, with recent support in the American Recovery and Reinvestment Act, takes a step toward continuous patient care, from birth to death, at a level of quality not possible with paper records. Going one step further, the combination of medical data and appropriate technology innovations allows medical professionals to progress from data and information that inform empirical or evidence-based decisions, to knowledge and intelligence that lead to the best possible care.
Comparative effectiveness is an important part of the new administration’s health care policy, and is absolutely necessary to achieve the best possible care for all Americans. Our culture of medical care must embrace data-driven medical decisions, because there is no meaningful patient and physician choice if neither is fully informed of the actual, empirical efficacy of available treatments. The work of Don Berwick at the Institute for Healthcare Improvement provides promise that physicians and their patients, armed with comparative
performance data, can work together to improve quality of care [15]. A major challenge in quality comparison analyses is how to properly use the data collected. Heterogeneous patient populations and complex disease profiles make it difficult to compare the overall effectiveness of therapeutic interventions. Today there are eighty-nine varieties of leukemia and lymphoma, compared with only five known types fifty years ago [13]. Similarly, diabetes is now understood to be a collection of related disorders, and not the single disease it was believed to be decades ago. Inflammatory bowel disease was assumed by a previous generation of physicians to be a psychiatric disorder. Each of these cases warns that partial understanding of a disease, or group of similar diseases, can undermine our attempts to assess treatment effectiveness and measure its value. Better health information technology and continued development of innovative diagnostics will improve understanding of disease and patient responses to treatments, and, therefore, increase the disease populations to which comparative effectiveness data can be intelligently applied.
Hospital Care Expenditures
Hospital care and physician and clinical service expenditures comprise over 50% of the nation’s total health care costs. Though an increasing portion of hospital care dollars are spent on technology that has yet to undergo cost-benefit assessment, substantial hospital expenditures result from high-volume or high-cost procedures that could be done equally effectively or better, but cheaper, with increased investment in innovative technologies [see 16]. Further hospital care spending increases are due to increased demands of hospital management of prevalent chronic diseases that hospitals are ill-equipped to provide. For instance, obesityrelated disorders are, in most cases, better managed by a reinforced primary care infrastructure before they result in acute emergency response or chronic care at the hospital level. A physician’s obligation to her patients and to her profession’s ethical codes, in many cases, drives her to proceed with a less-thanoptimal test or intervention so long as it is safe, even if there is questionable likelihood of it yielding important medical information. Given present understanding of human disease, the development of innovative technology to address the above hospital care challenges is a more feasible way to address growing health care costs than are efforts to convince or mandate physicians to avoid “wasteful” medical interventions. Instead, incentivizing academic researchers and start-up companies to develop lower-cost ways to achieve the goals of common, high-volume hospital procedures outside of the hospital leads to sustainable cost-saving at the hospital level, and immediate job creation at the start-up company level. Coupling this initiative with the development of technology that improves diagnostic methods, data collection and management as discussed above will help shift management and treatment of certain patient segments away from hospitals to other areas of the health care system where they are better and more cost-effectively served.
Criticisms of Technology-Aided Cost Reduction
Economist Henry Aaron claims that “rapid scientific advance always raises expenditures, even if it lowers prices” [17]. Indeed, history is replete with examples of massive technological advance that drive total outlay increase despite lowering cost (e.g., automobiles, airplanes, television, computers); the cost per capita is reduced, but overall expenditures increase because of essentially infinite increase in new adopters. Health care technology can defy this rule for several reasons. First, individuals contribute to health care expenditures regardless of their insurance status, in the form of taxes, reduced income, and higher prices [18]. The precise goal in providing universal health care, therefore, is to reduce the overall cost per person, which would simultaneously reduce overall expenditures. Second, while new medical technologies sometimes do introduce complements to what already exists, more often they replace entire sets of older methods, or procedures, or technologies, pruning out less effective, more expensive predecessors and/or obviating the need for multiple, serial intervention attempts. Examples from the care of diabetes and breast cancer demonstrate that such innovations tend to move a field from highly variable intuitive medicine to more efficient precision medicine [13,19]. Moreover, typical examples of technologies that drive expenditure increase in medicine (e.g., cardiovascular disease interventions) are innovations that meet significant need; though these exceptions do increase overall expenditures, addressing our cost problem by ex ante impeding development of life-saving or life-improving technology is both politically and practically unfeasible. Finally, advances in health care technology can reduce the uncertainty or volatility of the diagnostic/therapeutic process to maximize the value of health professionals’ time. Thus, though a novel technology, in an isolated context, might increase expenditures, it can still drive overall cost reduction in a clinical setting by minimizing demands on expensive health professionals.
Conclusion
The role of science and technology innovation in health care reform is crucial to successful efforts to improve the accessibility and affordability of health care without compromising immediate and future quality. The recent American Recovery and Reinvestment Act will provide $15 billion for basic science and $50 billion to upgrade America’s technology infrastructure, which will work immediately to provide jobs and a foundation for a stabilized economy. Equally importantly, it will help facilitate discoveries that will address human health problems. This commitment toward health science innovation must remain strong in the battle for health care reform. The movement for a stronger health system is fueled by the conviction of committed leadership and a motivated constituency, a sound intellectual agenda, and the necessary call for shared responsibility. Technological innovation will continually change health care definitions, mores, and ideas of how it is best delivered [20]. Accepting the responsibility of universal coverage and the value of information collection, analysis, and distribution will take us steps closer to the next revolutionary health care reform.
References
1. National Health Expenditures Accounts. Baltimore: Centers for Medicare and Medicaid
Services, 2005.
2. Newhouse JP. Medical Care Costs: How Much Welfare Loss? J Econ Perspect 1992; 6:3-29
3. Bodenheimer T. High and Rising Health Care Costs. Part 1: Seeking an Explanation. Ann
Intern Med 2005; 142:847-854.
4. Cutler DM, Rosen AB, Vijan S. The Value of Medical Spending in the United States, 1960-
2000. NEJM 355(9):920-927.
5. Cutler DM, Wilensky GR. Perspective Roundtable: Health Care in the Next Administration.
NEJM 2008; 359(15):1-16.
6. Health Care Costs: A Primer, Kaiser Family Foundation, August 2007.
7. David Walker, 60 Minutes interview. July 8, 2007
(http://www.cbsnews.com/stories/2007/03/01/60minutes/main2528226.shtml)
8. Emanuel EJ. The Cost-Coverage Trade-Off. JAMA 2008; 299(8):947-949.
9. Cutler DM, McClellan M. Is Technological Change in Medicine Worth It? Health Affairs
2001; 20(5):11-29.
10. Bodenheimer T. High and Rising Health Care Costs. Part 2: Technologic Innovation. Ann
Intern Med 2005; 142:932-937.
11. Aaron, HJ. Waste, We Know You Are Out There. NEJM 2008; 359(18):1865-1867.
12. Aitken M, Berndt ER, Cutler DM. Prescription Drug Spending Trends in the United States:
Looking Beyond the Turning Point. Health Affairs 2009; 28(1):w151-w160.
13. Christensen CM, Grossman JH, Hwang J, The Innovator’s Prescription (New York:
McGraw Hill, 2009).
14. U.S. Healthcare Efficiency Index. http://ushealthcareindex.com.
15. Gawande A, Better (New York: Picador (Henry Holt and Company), 2007).
16. Wells PNT. Can Technology Truly Reduce Healthcare Costs? IEEE Engineering in
Medicine and Biology Magazine. January/February, 2003.
17. Aaron HJ. The Unsurprising Surprise of Renewed Health Care Cost Inflation. Health Affairs
2002. Suppl Web Exclusives:W85-87.
18. Emanuel EJ, Fuchs VR. Who Really Pays for Health Care? JAMA 2008; 299(9):1057-1059.
19. Hwang J, Christensen CM. Disruptive Innovation in Health Care Delivery: A Framework for
Business-Model Innovation. Health Affairs 2007; 27(5):1329-1335.
20. Aaron HJ. The Pitfalls of Overreaching in Health Reform. Health Affairs 2009; 28(2):w184-
187.
21. Centers for Medicare and Medicaid Services (2006), Office of the Actuary, National Health
Statistics Group.
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