Book Review

The Changing Economics of Medical Technology

Technology and Health Care in an Era of Limits

N Engl J Med 1993; 329:1748-1749December 2, 1993

Article

The Changing Economics of Medical Technology
(Medical Innovation at the Crossroads. Vol. 2.) Edited by Annetine C. Gelijns and Ethan A. Halm. 210 pp. Washington, D.C., National Academy Press, 1992. $24.95. ISBN: 0-309-04491-X

Technology and Health Care in an Era of Limits
(Medical Innovation at the Crossroads. Vol. 3.) Edited by Annetine C. Gelijns. 283 pp. Washington, D.C., National Academy Press, 1992. $36. ISBN: 0-309-04695-5

It is not an overstatement to say that the American health care system is driven by technology. Physicians are procedure-oriented, patients demand the latest in technological advances, the industries that manufacture health care devices and drugs are remarkably innovative and aggressive in marketing their products, and reimbursement policies favor technological procedures. Since technology is so prominent in our health care system and since most technological procedures increase costs, it is not surprising that medical technology is often considered to be the principal culprit in the continuing rise of health care costs.

These two volumes of “Medical Innovation at the Crossroads,” based on workshops sponsored by the Institute of Medicine, are thus timely. The Changing Economics of Medical Technology (volume 2) focuses on the economics of innovation and the interplay between innovation and public policy, especially with respect to regulation and reimbursement. Technology and Health Care in an Era of Limits (volume 3) represents an attempt to visualize the restructured U.S. health care system that will emerge from the “massive social struggle over its reform” and how this revised system will affect technological innovation.

At the outset, it should be noted that the two workshops were organized under the aegis of a committee on technological innovation in medicine, with heavy representation of the drug and device industries, especially for the workshop leading to volume 2. Similarly, several of the contributors to these books have close ties to the two industries.

For those familiar with the issues concerning medical technology in the American health care system, these books provide few new insights, but for the novice, they offer a great deal of information. Volume 2 brings together articles on a variety of topics, including the costs and benefits of new technological procedures, public policy and access to new drugs, and reimbursement for surgical innovations. The concluding chapters, on European policies governing medical technology and Japan's pharmaceutical industry, seem tangential. As is inevitable in this type of book, there is a good deal of unevenness in the quality of the chapters. The contribution of Neumann and Weinstein on the costs and benefits of technology is particularly informative and interesting.

Volume 3 is intended to predict the structure of the health care system that will emerge from deliberations over reform and “the likely implications of the new system for practitioners, patients, and the generators of new medical technology.” This is an interesting exercise in crystal-ball gazing, given the complexity, problems, and vested interests of our present system. Not surprisingly, it is difficult to discern from the chapters any single view of what the future may hold for the American health care system. The topics range from managed care to health care in Canada and the possible responses of hospitals, physicians, patients, and innovators to managed care. In addition, there are discussions of previous and current health policy positions and regulations, such as the certificate-of-need program.

In his chapter on setting limits on health care expenditures, Wennberg makes a strong case for building the necessary infrastructure in the evaluative sciences and cites Canada as an example of “what could be done in a system with global limits in place.” Canada has indeed moved ahead by establishing in three provinces government-linked entities for technology assessment, which are responsible for assisting health care policy makers by evaluating important technological advances. In another chapter, Soper and Ferris describe the growth and prominence of managed-care arrangements in the United States and make a strong case for their role in the development, evaluation, and dissemination of technological procedures.

There is an interesting comparison of technological inno-vation and marketing in the United States and Canada, including the surprising comment that “the U.S. continues to promote progress in health care technology, apparently oblivious to the fact that such promotion is at odds with the rhetoric of health care cost control.” Promotion of technological advances may indeed be “at odds” with the restriction of health care expenditures, but what is the remedy? Eliminate the National Institutes of Health? Suppress research and development by pharmaceutical firms and medical-device manufacturers? Unfortunately, the authors do not suggest any answers for the United States, but they describe the Canadian approach to limiting the diffusion of capital equipment. Whether that approach can be applied to the American health care system, given the differences in the two countries -- particularly in the capacity for technological innovation -- is debatable.

Not until the reader reaches the concluding chapters of volume 3 is there a discussion of the implications of health care reform for medical innovation, but it is focused on managed care. Regardless of the shape that health care reform ultimately takes, there is nearly universal agreement on the importance of developing technological advances that are cost effective.

In spite of these shortcomings, I know of no other books that address the likely impact of economic limits and health care reform on technological innovation in medicine.

Seymour Perry, M.D., F.A.C.P.
Institute for Health Care Research and Policy, Washington, DC 20007