Medical Technology and the Health Care System A Study of the Diffusion of Equipment-Embodied Technology (1979) / Chapter Skim
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ECONOMIC COSTS
ECONOMIC COSTS
Pages 14-22
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From page 14... ...
Studies of the impact of different classes of medical technology on hospital or health care expenditures alone ignore such benefits, but they do indicate the kinds of technology likely to increase costs (that is, to lead to increases in total per-capita health care outlays) and the need of demonstration of improved patient benefits.
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From page 15... ...
THE DIRECT COSTS OF EQUIPMENT-EMBODIED TECHNOLOGY There is no question that the use of medical equipment in providing health care services has increased dramatically over the past 5 years alone. Total domestic shipments of x-ray apparatus and electromedical devices increased from $444 million in l972 to an estimated $l.3 billion in l977, an annual growth rate of about 24 percent over the past 5 years.122 Predictions for l978 are that the industry will sell $l.6 billion of this sophisticated medical equipment, an increase of 20 percent over l977.122 Alone, this
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From page 16... ...
Much of the circumstantial evidence linking equipment-embodied technology to increased hospital and health care costs is based on recent studies of the increased input intensity in the provision of health care services. In l972, Waldman133 estimated that increases in real inputs (labor and material)
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From page 17... ...
THE IMPACT OF MEDICAL TECHNOLOGY ON TOTAL HEALTH CARE COSTS Several studies have attempted to measure the total impact of medical technology on health care expenditure increases using a residual approach. These studies attempt to account for all other sources of health care expenditure increase, and the unexplained residual of changes over time is assumed to measure the effects of technological change.
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From page 18... ...
Biomedical research and technological change were estimated to cause annual reductions in total health expenditures of 0.5 percent. This compares favorably with a 20-year study by Fuchs, which found that technological change had a positive residual effect on total health care expenditures of 0.6 percent annually between l947 and l967.
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From page 19... ...
Unfortunately, only a few conditions were studied, and trends detected in this small sample of conditions cannot be assumed representative of all conditions. Therefore, the results of the analysis cannot be used to identify net effects of technological change on total health care expenditures.
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From page 20... ...
Part of the increase must be attributed to changes in prices of hospital inputs and intensity of health services delivered in the hospital setting relative to those delivered in other settings. Trapnell and McFadden114 have studied the distribution of annual expenditures for insured health care services between l965 and l975 in a large group health insurance plan.
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From page 21... ...
Although critical care implies the intensive application of labor as well as equipment, it is obvious that critical care and specialized care units are equipment-intensive relative to unspecialized hospital beds. Today's increasing allocation of health care resources to the care of fewer patients is a trend whose ultimate benefits are largely unknown.
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From page 22... ...
Today, about 80 percent of all group health insurance benefit packages include a total coverage limit of $l00,000 or more, while as recently as l97l fewer than l percent had such a limit. Consumers increasingly demand financial access to services for catastrophic illness even when those services appear to provide only marginal improvements in patient outcomes.
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