Health Technology in Ontario: Report to the Ontario Health Review Panel

David Feeny

No 7, Centre for Health Economics and Policy Analysis Working Paper Series from Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada

Abstract: Technology refers to the body of knowledge concerning the conversion of inputs into outputs. The health-care system produces health-care services. Health-care services in turn, in conjunction with the activities of the patient, her genetic endowment, and a considerable amount of random variation, produce changes in health status in the patient. Improvements in health status are valued by the patient, both intrinsically because health is a basic component of quality of life and because improved health status enhances other production and consumption activities. The desired outcome of the use of health-care resources is improvements in health status that are important to the consumers of health-care services, the patients. Health technology affects this outcome indirectly through the production of health-care services. The indirect nature of the impact invites a focus on process, rather than outcome, that is reflected in practice throughout most of the health-care system. It also suggests challenges in evaluating health-care technologies. New health-care technologies may represent improvements over existing technologies in one of several ways. Potentially favourable effects may occur when the new technology represents an improvement in quality of existing services or when it represents a less costly method of obtaining the same outcome with no sacrifice in quality. The new technology may also add a whole new capability to the system. Less favourable effects are obtained when new technologies represent no improvement, are more costly yet generate no improvement over existing methods, or add new capabilities that have no effect on health outcomes. A major challenge for the Ontario health-care system is the early identification of which pattern among these is likely to occur as each new technology becomes available. Although the Ontario health-care system has done relatively well at containing excessive adoption of many important new technologies, it is not clear that the mix of technologies chosen and the subsequent utilization patterns have obtained the greatest value for the level of expenditures. One of the major themes developed in this Report is the need for more thorough clinical and economic evaluation before widespread adoption. The second and third themes follow as implications of that strategy. A heavier reliance on evaluation will generate demands for rigorous and timely information. That information, however, will have little impact unless key actors within the health-care system are given the incentives to use it wisely. Because technology is at the core of the production process for health services, technology policy cannot be divorced from other policy initiatives aimed at rationalizing health-care delivery. In the sections that follow, a foundation will be laid by discussing definitions and characteristics of technologies, examining typical patterns of diffusion of new technologies, briefly reviewing current policy in Ontario, and considering the role of new technologies in increasing health-care costs. The fundamentals of an evaluative strategy to establish clinical effectiveness and economic efficiency will then be developed, and their implications explored. Social and ethical issues are then discussed and finally, conclusions are drawn.

Pages: 46 pages
Date: 1988
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