High and Rising Health Care Costs. Part 2: Technologic Innovation

Technologic innovation, in combination with weak cost-containment measures, is a major factor in high and rising health care costs. Evidence suggests that improved health care technologies generally increase rather than reduce health care expenditures. Greater availability of such technologies as magnetic resonance imaging, computed tomography, coronary artery bypass graft, angioplasty, cardiac and neonatal intensive care units, positron emission tomography, and radiation oncology facilities is associated with greater per capita use and higher spending on these services. Because the spread of new technologies is relatively unrestrained in the United States, many of these technologies are used to a greater extent than in other nations, and the United States thereby incurs higher health care costs. Nations with a greater degree of health system integration have relied on expenditure controls and global budgets to control costs. Although diffusion of technology takes place more slowly in more tightly budgeted systems, the use of innovative technologies in those systems tends to catch up over time.