Medical technology as a key driver of rising health expenditures: disentangling the relationship

Corinna Sorenson, Michael Drummond and Beena Bhuiyan Kahn

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Health care spending has risen steadily in most countries, becoming a concern for decision-makers worldwide. Commentators often point to new medical technology as the key driver for burgeoning expenditures. This paper critically appraises this conjecture, based on an analysis of the existing literature, with the aim of offering a more detailed and considered analysis of this relationship. Several databases were searched to identify relevant literature. Various categories of studies (eg, multivariate and cost-effectiveness analyses) were included to cover different perspectives, methodological approaches, and issues regarding the link between medical technology and costs. Selected articles were reviewed and relevant information was extracted into a standardized template and analyzed for key cross-cutting themes, ie, impact of technology on costs, factors influencing this relationship, and methodological challenges in measuring such linkages. A total of 86 studies were reviewed. The analysis suggests that the relationship between medical technology and spending is complex and often conflicting. Findings were frequently contingent on varying factors, such as the availability of other interventions, patient population, and the methodological approach employed. Moreover, the impact of technology on costs differed across technologies, in that some (eg, cancer drugs, invasive medical devices) had significant financial implications, while others were cost-neutral or cost-saving. In light of these issues, we argue that decision-makers and other commentators should extend their focus beyond costs solely to include consideration of whether medical technology results in better value in health care and broader socioeconomic benefits.

Keywords: medical technology; health expenditure; health policy; costs (search for similar items in EconPapers)
JEL-codes: I10 (search for similar items in EconPapers)
Date: 2013-05-30
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Citations: View citations in EconPapers (17)

Published in Clinicoeconomics and Outcomes Research, 30, May, 2013, 2013(5), pp. 223-234. ISSN: 1178-6981

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:48043

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