Advancing medical technology increases health-care costs

Jan 9 2007

Advances in medical technology are a main factor driving the trend of increasing health care costs, and industry stakeholders agree that improved evaluation methods are needed to better measure the benefits and risks of new technologies and procedures in order to avoid misallocation of health care dollars.

In a newly published feature paper, Rita Redberg, MD, MSc, director of Women's Cardiovascular Services at UCSF Medical Center and professor of clinical medicine in the UCSF School of Medicine, examines this subject. Her analysis appears in the January/February 2007 edition of the health policy journal Health Affairs, which devotes the full issue to cardiovascular medicine.

"Any new technology is only valuable to the extent that it leads to improved patient care," says Redberg. "The current 'pay now, benefits might follow' model is in part to blame for why the U.S. spends more per capita on health care than any other nation yet its system ranks only 37th in performance."

Current estimates show health care spending in the United States exceeds 15 percent of the gross domestic product. According to the National Coalition on Health Care, this spending--more than three times the rate of inflation--is expected to increase to more than 20 percent of the GDP in the next decade.

In the paper, Redberg shows how current health care technology policy and adoption processes enable high costs to occur. She proposes an evidence-based process that would produce a more unified medical policy that is better equipped to grapple with tensions among quality, innovation and value than the current U.S. system. To date, the U.S. has no nationally coordinated policy on technology assessment and lacks a widespread clinical electronic medical record database--which hinders data gathering for technology assessment.

A wide range of participants in the health care industry--from medical institutions and insurance companies to Medicare and other administrative agencies--agree on the need for a new review system, she says.

"Using study data that shows which patients will have a net benefit from a drug or procedure is called evidence-based technology assessment. Its importance is becoming increasingly recognized," Redberg says. "However, evidence-based review of new technology is not always translated into health policy."

She argues that as the volume, complexity and cost of new medical technology increases, the need for evaluating benefits and risks becomes increasingly important. "Unfortunately, few systematic criteria are currently applied to ensure patient benefit after formal requirements for Food and Drug Administration approval and insurance coverage are met," she says.

Using cardiac computed tomography angiography as a case study, Redberg says a more systematic policy approach to evaluate the efficacy of new technologies would also help determine patient benefit and ensure that the benefits justify the cost. She explains that CTA is a particularly useful example for technology assessment because it is undergoing rapid, widespread adoption due to advances in imaging, a rise in entrepreneurial activity by physicians and increased patient demand due to media attention and direct-to-consumer advertising. This adoption is occurring despite little evidence showing CTA leads to better patient care than alternative procedures.

According to Redberg, in order to evolve toward a more systematic approach and increase value, there first must be an acknowledgement of the importance of evidence-based health policy, and second, an evidence-based approach that includes reevaluation over time must be incorporated into approval and coverage decisions.

"Including evidence-based decision-making in the healthcare coverage process would ensure that use of new therapy and technology is tied to evidence of clinical benefit, resulting in a value-based health care system," Redberg says.