How New Medical Technology Affects Health Care Costs?

Yearly healthcare spending in the United States is expected to cost $4 trillion by 2015. Health care costs have increased to more than double from just 35 years ago. The fact of this rapid increase has led to much discussion on the cost containment issue and healthcare affordability. The question as to why healthcare spending is rising so rapidly opens a debate on how health information technology affects healthcare costs. Proponents of continuing to use the latest technology in all instances state that medical technology will cut future health care costs overall, while those opposed see the growth of technology as a major increase in cost.

A broad definition of medical technology refers to equipment and procedures used to deliver healthcare. Changes and upgrades in the latest technology include medical information and patients’ records transmitted electronically, new medical devices such as defibrillators, implantable insulin or pain medication pumps, and new procedures within joint replacement or angioplasty. Very few medical devices or procedures have not seen recent changes or upgrades and innovation continues at a rapid pace.

Whether changes in technology raise or lower health care costs in the long run, no-one argues the fact that Americans are living longer than they did just several decades ago. For example, new technology in tests and new drugs to combat heart problems helped to lower the death rate from heart attacks by nearly half since 1980. Better technology in neonatal care has raised the survival rate of premature babies with the use of newly designed ventilators to help develop infant lungs. New drugs now treat conditions that were previously fatal or debilitating, such as AIDS, end-state kidney failure and diabetes.

In attempting to determine the impact on cost, it is necessary to consider if new technology affects other healthcare services such as office visits to a physician or the length of stays in a hospital. New technologies can reduce the need for utilization of tests or treatment. For instance, a new way to diagnosis or screen for an illness may be more expensive initially, but allow targeting new segments of the population and can lead to better and earlier treatment, thereby reducing the overall cost in the long term. A good example of this could be the development of a new vaccine, which may be initially expensive, but lead to great future savings by eliminating the need to treat those who otherwise may have contracted the disease.

In the ongoing debate, it is next to impossible to accurately predict how new medical technology will affect health care costs overall. Advances in education and training for health information technology will also play a role in health care costs. As technology advances, education and training costs will rise accordingly. Advances in technology make it possible to treat previously untreatable people and diseases, it is difficult to determine in some cases if in the long run it costs more or less to use the new procedures, drugs or devices. To those who agree with using everything and anything available to prevent or treat diseases and extend life at any cost, no expense is too great in this quest.

Whether the implementation of every medical breakthrough and new technology will raise, lower or level off the cost of health care, one thing is certain. New medical technology will continue to be developed, become available and put into use for one reason: because we can, we will.

Mitchell Gavillion is a freelance writer who covers various lifestyle industries including art, education, and fitness. Mitchell is passionate about education and believes it keeps people moving forward in life.

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2 thoughts on “How New Medical Technology Affects Health Care Costs?

  • August 11, 2011 at 2:52 pm

    Heart disease and its consequence, heart attack, is the leading cause of death in the U.S. and a good example of how new technology has changed the treatment and prevention of a disease over time. In the 1970s, cardiac care units were introduced, lidocaine was used to manage irregular heartbeat, beta-blockers were used to lower blood pressure in the first 3 hours after a heart attack, “clot buster” drugs began to be widely used, and coronary artery bypass surgery became more prevalent. In the 1980s, blood-thinning agents were used after a heart attack to prevent reoccurrences, beta-blocker therapy evolved from short-term therapy immediately after a heart attack to maintenance therapy, and angioplasty (minimally invasive surgery) was used after heart attack patients were stable.

  • August 11, 2011 at 2:51 pm

    Health expenditures continue to grow very rapidly in the U.S. Since 1970, health care spending has grown at an average annual rate of 9.8%, or about 2.5 percentage points faster than the economy as measured by the nominal gross domestic product (GDP). Annual spending on health care increased from $75 billion in 1970 to $2.0 trillion in 2005, and is estimated to reach $4 trillion in 2015. As a share of the economy, health care has more than doubled over the past 35 years, rising from 7.2% of GDP in 1970 to 16.0% of GDP in 2005, and is projected to be 20% of GDP in 2015. Health care spending per capita increased from $356 in 1970 to $6,697 in 2005, and is projected to rise to $12,320 in 2015.


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