Technology Drives up Cost of Medical Care (Myth #2)

I had been sort of sitting on Myth #2 because a lot of people reading and writing about health care costs at this time may not remember the brouhaha over MRI machines and their cost when they first became available to hospitals. Then Doug Farrago put up his Robot Wars poster on Authentic Medicine.

New technology, same old story.

Thank you, Doug.

Myth #2

The use of technology drives up the cost of medical care.

Truth

It’s not the technology, but the unnecessary duplication of equipment and services that drives up the cost of medical care.

Discussion

Any unmet costs of the new health care technologies are simply passed on to the consumer as increases in insurance rates. When hospitals and clinics invest in duplicate technology such as magnetic resonance imaging (MRI), they seldom need to demonstrate the need for the equipment, and they are not required to demonstrate that the equipment will generate the income to cover its cost.

With no regulation of capital expenses for hospitals and clinics, there is no requirement to make the acquisition of new technology cost effective. Any unmet costs of the new technology are simply passed directly to the consumer in the form of increased insurance rates.

Solution

Services should not be duplicated without need and should be cost effective. If the new technology will not pay for itself as a capital investment, hospitals and clinics should not be allowed to pass this cost on through to consumers in the form of higher insurance rates.

Note: If this presentation of the problem seems a bit simplistic, remember that it’s now over 20 years old, and Modern Medicine: What You’re Dying to Know was written in an attempt to give health care consumers some notion of what was going on with skyrocketing health care costs.

Of course, it would be nice if readers here would notice that the game hasn’t changed much in all those years.

dhaugen

Some young HR person once looked at my CV and asked me, quite seriously, if I had really done everything I had listed there. Well, yes. Because I am someone who can’t sit in a Morris Miller cubicle every day, much less for any great stretch of time. Once the problem is solved, I get bored and I’m ready to move on to the next challenge. This hasn’t afforded me any great stability in my work life. I simply arrive in places about ten years ahead of time. So far, at least, that penchant for early arrival hasn’t been accompanied with a pocketbook full of door knobs.

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