Rising Healthcare Costs not Directly Tied to Medical Technology, according to Study

A recent study by European researchers casts doubt on widespread claims that medical technology is the key driver of rising healthcare expenditures. Some medical technologies do contribute to greater healthcare costs, according to researchers, but others are actually cost-neutral or costs-saving.

Researchers reviewed 86 previous studies including policy, econometric and cost-effectiveness analyses, finding that how a particular medical technology impacts healthcare expenditures depends on several factors—availability of other treatments or interventions, patient populations and methodological approaches, for example.

Although quantitative evidence examined in the study did support the notion that new medical technologies do drive up healthcare costs in general, individual technologies impact healthcare spending in different ways:

  • “Low-tech” products including electrocardiographic devices and X-rays tend to stabilize or drive up costs
  • More sophisticated technologies used in cesarean sections, breast cancer treatment and coronary bypass surgeries tend to significantly drive up costs
  • Technology including computer-based information networks drive up costs only slightly

Healthcare spending and medical device technologyIn addition, the study identified other factors that either increase or decrease healthcare costs, including:

  • Whether a technology substitutes or replaces an existing service or product
  • Whether a technology expands the number of treatable conditions healthcare providers can cover
  • Whether a technology improves a healthcare system’s capacity to treat more patients

Researchers conclude the study by urging healthcare systems to use these results to better inform policy and practice, and to rely more on health technology assessments and effectiveness research to support new medical devices and equipment that provide the most benefit in terms of treatment and cost-effectiveness.

It should be emphasized that cost-effectiveness does not necessarily mean cost containment. As the study clearly indicates, the relationship between new medical technologies and healthcare expenditures is too complex to be evaluated merely in terms of addition and subtraction. 

Stewart Eisenhart