Sunday, June 23, 2013

New technology - is it worth it?

Recently the Congressional Budget Office published a report on Technological Change and the Growth of Health Care Spending.

This publication points to the rising costs of health care as the nation's central long-term fiscal challenge. We have summarized some of the important statements in this document here.

Over the past four decades, health care spending has roughly tripled as a share of the economy - from about 5 percent of GDP in 1960 to more than 15 percent today. Health care costs per person are rising faster than income.There has been a sharp increase in health care costs as a share of GDP-from 12.5 percent in 1999 to 14.5 percent in 2005. Most analysts agree that the most important factor has been the emergence, adoption, and widespread diffusion of new medical technologies and services: approximately half of all long-term growth in health care spending has been associated with technological advances.
Under CBO's projections, health care spending will double by 2035, reaching 31 percent of GDP. Thereafter, health care costs will continue to account for a steadily growing share of GDP, reaching 41 percent by 2060 and 49 percent by the end of the 75-year projection period.
Net federal spending on Medicare and Medicaid now accounts for about 4 percent of GDP. That rises to 12 percent by 2050 and 19 percent by 2082.
Most of that increase is due to excess cost growth, not to an aging population.
The rise in health care spending is the largest contributor to the growth projected for federal spending over the long term.
All of these projections raise fundamental questions of economic sustainability.

The report notes that costs known to be highly effective in some types of patients are sometimes provided to other patients for whom clinical benefits have not been rigorously demonstrated.

We surely see this in the practice of orthopaedics - CT scans and MRI's are used when plain films are sufficient, more complex prostheses are used when simpler and less expensive ones yield similar results, complex surgeries are used when simpler ones or non operative management work equally well.

The point is that each of us can help assure that expensive technologies are used only when expensive technologies are necessary. Everything new and more expensive is not necessarily better. Here a a few examples from a recent guest lectureship:

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