Unlike in many other areas, the costs of medical technology are not falling and their increasing use is contributing to rising healthcare costs. Many medical professionals equate advances in medicine with the increasing use of sophisticated technologies that are often expensive and out of reach for the average person. Technology is undoubtedly one of the reasons why healthcare is now better, more reliable and more efficient. Medical technology plays a very important role in people’s lives.
It has improved effectiveness, precision, and efficiency in healthcare. However, it can also be seen as one of the reasons why healthcare prices have risen. As an economist studying in health care, I find it difficult to know whether I should welcome new technologies or fear them. Surgeons can replace a heart valve with a plastic and metal heart valve that unfolds once it has been passed through artery repairs that were previously done by breaking the chest open.
Tailor-made cancer drugs promise to make deadly diseases treatable. At the same time, it is depressing to hear fiscal Armageddon forecasts as healthcare spending drives the US federal government into debt and nullifies wage growth for the average American. Even a recent slowdown in spending growth simply shifts the inevitable date when Medicare goes bankrupt.
Health insurance systems that pay for new innovations also promote medical progress. Medical treatments can be very expensive and their costs would be out of reach for many people, unless their risk of needing medical care could be summarized by insurance (either public or private). The existence of health insurance gives researchers and medical suppliers some assurance that patients have the means to pay for new medical products, and thus promotes research and development. At the same time, the promise of better health by improving medicine can drive demand for health insurance for consumers who are looking for ways to provide access to the type of medical care they want.
The analogue for the spread of medical technology is that a technology will expand its use until it has found its way into medical applications that are cost-effective. In fact, with the support of medical groups and the medical industry, Congress killed two federal agencies that were supposed to evaluate medical technology from a scientific and economic point of view.
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