July 16, 2009
Browsing the news pages of the web I came across an article in a journal that I am not familiar with from the USA, the grandly titled U.S. News & World Report. The report headed off on a familiar and now even more fashionable track of squarely identifying our industry as the villains of the peace in terms of driving up health costs. Not unusually, the author questions the value of medical technology and advocates more “comparative effectiveness” research. This is a relatively new theme in US health politics but to us Europeans health technology assessment has been with us for many years. The article has some sensible things to say about the need for rational evidence-based evaluation of new treatments which few would argue with.
The facts, however, are strikingly at odds with the general propositions presented in the article. We know that spend on medical technologies from our sector has barely moved from 6% of the total spend on healthcare over the last 15 years or so. This means that 94% of healthcare spend is from other areas, the largest of which is staff. Yes, healthcare spend has been rising but so has demand as the population ages and, just as important, expectations of patients rise. Life expectancy and quality of life have dramatically advanced for most of the developed world (as is evidenced by the pensions crisis) and medical technology has had a huge impact on both drivers of demand. Without medical technology the burden of chronic disease would be substantially greater than it is today. Delivery of healthcare would also be substantially more expensive than it is today were it not for technologies that have massively cost-reduced the provision of swathes of categories of care. Hospital stay times have plummeted in most developed counties over the last 20 years and that has not happened by management changes alone. Technology has been at the heart of all of the shortened periods patients spend in hospitals and this alone is the largest cost and productivity issue to affect health systems worldwide as it eliminates huge amounts of labour and facility costs. This has been driven by minimally-invasive surgery, better wound care, avoidance of bed sores using often simple but effective technology, better pre-operative and intra-operative management of patients so that they recover more quickly, better diagnostics which eliminate wasted investigations by targeting the therapeutic options more precisely… and lots more.
So let’s get off the “target industry with the blame for cost inflation” bandwagon and have a sensible discussion about how technology can address the health system goals for improving both outcomes and productivity. The industry is highly innovative and highly competitive so if you ask the right question there will be a queue of businesses at your door vying to provide the answer. The reason that the proportion of healthcare spend in the USA used to buy medical technologies remains unchanged is that, in most cases, competition has consistently driven prices down in real terms. Can the same be said for unit labour costs or other inputs into the delivery of healthcare?
John WilkinsonAuthor : MedTech Europe