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... ies that include chemotherapy have also contributed to rising health care costs. One field of medical practice which has become notorious for being costs-increasing is the study and treatment of heart attacks. In the treatment of heart attacks the prime cost-increasing technologies like the introduction of intra coronary infusions and coronary bypass surgery.
A study using Medicare claims from 1994 to 1999, report a four percent annual increase in the average reimbursement for treating elderly heart attack patients. They caused the majority of this increase to the diffusion of new technologies for performing revascularization procedures. Over the period of the study procedures such as cardiac catheterization rates rose from eleven percent to forty-one percent of heart attack patients. Bypass rates rose from five percent to thirteen percent, and angioplasty rates rose from one percent to twelve percent. The population that was studied was overwhelmingly enrolled in traditional FFS Medicare, therefore any finding must represent a spillover. Different approaches are used to determine the impact of new technologies and innovations on health care costs one approach, called the affirmative approach, focuses on individual technologies or diseases.
This approach suffers from an inability to access the impact of technology on cost growth. The body of evidence suggests that the impact of technology varies by disease. One study notes that in certain areas, technology clearly lowers costs, particularly when that technology facilitates complete cure or prevention of a disease One example of this type of innovation is the Salk-Sabin polio vaccine, which is inexpensive to develop and manufacture and almost completely eliminates the high costs of polio treatment. Another approach that is used to examine the effect of technology on health care costs is known as the residual approach. This approach views technological advances as being the sole reason for rising health care costs simply because the innovations are so expensive that there must be a method of which to pay for the invention and further development of the technology. Several studies provide evidence linking the conclusions from the residual approach to those of the affirmative approach various criteria based on observed changes in cost to identify technology-related changes in expenditures.
They do not examine specific technologies. Their findings show that the technical change was the single largest cause of the increase in the cost per inpatient case and much of the remaining increase may also be attributable to medical innovations. Also, two other studies in 1999 examine overall growth in physician expenditures during the late 1980 s to 1998. They do not examine specific diseases or technologies but they distinguish the growth of expenditures by physician type or service type.
In both cases the study concludes that cost growth was greater in areas where technological innovation was high such as cardiology or orthopedic surgery. Therefore when one combines this evidence with that from the remaining and affirmative approaches medical technology appears as a whole to be a prime driving force of health care cost growth. For this reason in the long-run impact of managed care on cost growth will depend on the extent to which managed care alters the rate of diffusion of medical technology. It is important to note that high and even rising costs of health coverage may be desirable by the American consumer, and certainly by the health insurance companies of the nation. Consumers naturally demand the best of care when they or their loved ones require treatment for a disease. Health care cost growth is not is not necessarily undesirable if the consumer is willing to pay for the costs associated with new medical technology.
Also the amount of labor devoted to health care in the United States is not excessive by international standards. There is an understandable fear among government officials and the American public that, over the course of the next several decades quality health insurance will become unaffordable to many and in some cases completely unattainable. The concept of managed care was developed as a method of keeping these costs somewhat reasonable, and ensuring that health care would be available to all American consumers with minimal financial difficulty. Careful examination of the problem of rising health care costs have shown that if managed care does not constrain health care cost growth, another factor will do so. Several scenarios are possible though not absolute. One proposed option is for managed care companies to increasingly ration care and services.
Many consumers may be unhappy with this option, but it may help to curtail the rising costs of health care. This suggests that various market characteristics, such as the failure of employers to charge their employees the incremental cost of health plans have limited the effectiveness of managed care. Managed care may become more effective in the future if purchasers (employers and employees) are more price sensitive. Nevertheless if technological progress continues to place pressure on costs constraining cost growth will entail greater restrictions on access to these services. A solution such as this would require not only economic but political and legal support to permit stronger. This remains an issue of great controversy with states responding to public perceptions of rationing by adopting mandatory coverage of certain services and requiring hospitalization following procedures such as mastectomies and child birth.
It is likely that if this scenario does not result such a system will be characterized by wider differences in access to care particularly to new technologies than we have generally accepted. It is unclear thus far whether this solution represents a permanent variation in coverage policies or simply a variation in when plans opt to cover emerging innovations. Another proposed solution is to completely abandon the private competitive health care system for a nationalized system. Of course this solution would not solve the underlying problem of tension between access to care and cost control. Some forms of government action, such as premium regulation would maintain health plan control over issues of technology advances. Such an task would undoubtedly move the issue of health care and costs from the economics to the political side even more intensely than it already is.
Yet another approach involves technology developing in such a way to reverse the traditional relationship between technological progress and cost growth. Reasonable evidence suggests that insurance has been a major factor contributing to the development of new medical technologies. A study shows that as much as seventy percent of the impact of cost-increasing technologies on costs growth can be indirectly attributed to insurance coverage. Naturally a system dominated by managed care would increase the incentives to develop cost-reducing technologies and decrease the incentives to develop cost- increasing technological innovations. Little evidence exists assessing and proving this trend. Reports that preliminary evidence indicate that there has been a shift in the types of technologies developed, but the extent of that shift and its ultimate impact on costs remains to be assessed.
Regardless of which path is taken evaluation of medical technology is likely to become increasingly important as costs continue to rise and the American consumer demands the most effective and up-to-date innovations. Given all of the complex information in the health care sector a clearer understanding of how managed care plans ration medical technology is essential.
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Research essay sample on Management Seminar On Managed Health Care And Technology
