The Impact of Technology on Health Care Cost and Policy Development

As health care spending in the United States continues to increase at a pace significantly faster than that of other sectors of the economy, there seems to be greater interest and willingness to consider the root causes of the rise and to explore options for reform. Some of the reasons for cost escalation are associated with a growing and aging population that all too often makes inappropriate personal choices, but others are clearly attributable to growth in the cost of drugs, hospital and nursing home care, provider reimbursement, and durable medical equipment. Some health care economists have suggested that the rapid introduction of new technologies has also played a major role. Vendors understandably desire early market penetration of any new device or technology, but often this may be accomplished before significant evidence of benefit is available. Our current system of device approval unlinked to coverage and payment has produced further disruption in the system. The nature of the problem and consideration of various factors in the introduction, implementation, and evaluation of new technologies will be considered.