The European Health Technology Institute investigated the conjecture of medical technology progress being the key driver of rising health expenditure in order to disentangle the relationship. The research demonstrated that the impact of medical technology on healthcare costs is the result of multiple, dynamic factors. Consequently the impact across technologies differs greatly in that some result in cost-increases while others, by being cost-neutral and even cost-saving, provide good opportunities to maintain the sustainability of the healthcare system. The European public health policy puts forward good health as a pre-requisite for personal wellbeing and economic growth, to restrict inequalities and to ensure the availability of human capital. Smart investments in healthcare are needed to maintain and further improve our health and well-being, while keeping healthcare expenditures under control.
At a time of changing demographics, increasing demand for health and expanding health burden due to chronic diseases, healthcare expenditures have been rising over the last decade at a pace faster than economic growth calling for an increased part of the public spending. In addition to these factors, progress in medical technology is often pointed to as another or even the key driver of this rising healthcare expenditure.
The aim of EHTI’s latest research was to disentangle this relationship and determine if medical technology (considering all medical technology such as medical devices, in vitro diagnostics, imaging… but excluding medicines and biotechnologies) is truly a major driver of rising health expenditures.
A broad literature review identified 86 publications on the relationship between medical technology diffusion and health expenditure with 52% qualitative in nature, 40% focussing on cost-effectiveness and 24% being a multivariate analysis. Of the studies reviewed that attempted to quantify this relationship, mainly econometric studies, the overall impact (ie, proportion of the cost increase) averages at about 50% of the residual effect. However, the evidence from the cost-effectiveness studies and descriptive analyses suggest that the relationship between advances in medical technologies and health expenditures is not straightforward nor static, but contingent on a wide range of varying factors including whether there are technological substitutes available, whether the technology allows for a greater number of conditions to be treated, whether life is extended with additional years of healthcare consumption for the patient, or at which point in the treatment pathway the technology is being used.
“Our research findings indicate that there is no uniform relationship: technology that is increasing costs in one setting or in one group of patients, can be cost-neutral and even cost-saving under differing circumstances” EHTI lead researcher Corinna Sorenson said. “Moreover, even if a given technology increases costs, it may increase benefits by an even greater amount and therefore be considered a worthwhile investment” she added.
The methodological limitations of the approaches used in the analysed studies make it challenging to define a clear conjecture between medical technology and rising healthcare expenditures. Moreover, the majority of the studies used reported results on an aggregate level and looked at medical technology collectively. As such, they cover a wide range of interventions, including novel drugs in areas such as cancer, many of which greatly add to costs. “Different types of technologies arguably impact health spending differently”, said Prof. Mike Drummond, overviewing the research. “It would be more productive to address this question at disease specific level and to assess whether addressing the health issue and associated economic burden justify an investment in technology”, he added.
“In this assessment it will be critical to consider the socio-economic impact of medical technology. EHTI research is committed to researching this value and to providing evidence to facilitate informed decision-making that will lead to smart and valuable investments in medical technology”, added Yves Verboven, Executive Director of ETHI.
Medical technology as a key driver of rising health expenditure: disentangling the relationship, Sorenson C, Drummond M, Bhuiyan Khan B, ClinicoEconomics and Outcomes Research, 30 May 2013, DOI: 10.2147/CEOR.S39634