The Dynamics of Technological Change in Medicine

This paper contrasts a dynamic and interactive view of technological change with the linear model of medical innovation that is still so deeply ingrained in many policy discussions. In particular, it focuses on the role of feedback mechanisms between the users and the developers of medical technology and the demand and supply forces (including competition among medical specialties) determining this feedback. It explores three distinct mechanisms by which technological change may contribute to rising health care spending: intensity of use of existing technology, introduction of new technologies, and expanded application of these new technologies.