The healthcare industry's unchecked appetite for new technologies was brought to the forefront again last week by the release of a study that found that supply drives demand and in turn helps fuel greater spending.
The study, bankrolled by the Blue Cross and Blue Shield Association, was touted as the first to offer proof that the availability of certain technologies such as diagnostic imaging and cardiac care was at least partly culpable for increased utilization and healthcare costs.
The conclusions, which had a familiar ring, didn't shock anyone. In some ways the study describes a "field of dreams" world of healthcare: If you build it, they will come, said Laurence Baker, the study's lead author and an associate professor at Stanford (Calif.) University School of Medicine.
"That's a pretty universal conclusion of our work," said Megan Cooper, editor of the Dartmouth Atlas of Healthcare, a 10-year ongoing study of healthcare resources and utilization in the U.S. "The availability of things drives their utilization-diagnostic technology is particularly a generator of downstream events. If you have more capacity to look for disease, the more you are going to find and the more you find, the more you are going to do something about it even without evidence that doing something is particularly effective."
Released by the journal Health Affairs at a Washington briefing, the study assessed the use of new technologies in four areas-cancer, cardiac and newborn care and diagnostic imaging-and found that cardiac care and diagnostic imaging seem to be prime culprits in causing overutilization. The authors said the strongest link between higher availability and higher spending was in freestanding diagnostic imaging. For example, adding just one more MRI unit to a population base of 1 million was linked to raising costs by $395,000 per million beneficiaries per year. Giving cardiac catheterization capabilities to one hospital per million people increased hospitalizations involving the procedure by 2.2% per beneficiary.
There was much less evidence of the same link for neonatal intensive-care units and cancer technologies. Making more PET scanners available was linked to greater use but not always greater spending, the authors said. They also found an "inconsistent" relationship between the availability of NICUs and NICU spending.
The study also uncovered striking results pertinent to the federal Medicare program: New technologies spurred higher prices for Medicare than for commercial insurers. Adding one MRI unit per million population was related to a 0.1% increase in spending on outpatient MRI in the commercially insured population but nearly 2% in the Medicare population. The authors speculated that unfettered by price regulation as Medicare is, the commercial market allows for more competitive price-setting.
The study marked the latest in a series of Blues association-sponsored studies that point a finger at medical technology for jeopardizing the affordability of healthcare (Oct. 28, 2002, p. 6). But taking the problem one step further, a panel discussion by industry leaders commenting on the findings highlighted the haphazard way in which new technologies are adopted and deployed. The experts uniformly stressed the need for more coherent policies.
"What I love about this paper is its focus on the need to evaluate technologies," said Carolyn Clancy, director of the federal Agency for Healthcare Research and Quality. "We know very, very little of the benefits and potentially the harms of some of these new technologies."
Molly Coye, founder and chief executive officer of the Health Technology Center in San Francisco, said the study produced "exactly the results we should expect" given the nation's proclivity to add layers of technologies rather then substitute new ones for old ones. Healthcare costs will only increase in the next five years as new technologies are introduced, and there is a clear need for reimbursement reform that takes quality into account, she said.
Despite the findings, Coye said many technologies save money and to a lesser extent, some save money and improve quality. "Of those that improve quality and cost more, a fair amount of those additional costs are much greater than necessary because of the chaotic process in which healthcare is deployed," she said.
Blues officials said the study was a foundation for a dialogue on implementing policies to govern the adoption of technology.
"We initially looked at what was driving up costs in health plans and as we looked across provider settings, we found medical technology was a major factor driving this," said Maureen Sullivan, the Blues association's senior vice president. "This was a natural (study) following from that." The association "strongly advocates" new technology that is cost-effective and improves the quality of patients' lives, she said.
Providers and technology vendors said they found the findings obvious and simplistic. "Basically it was an aggregation of data, and I think it showed an incomplete picture of overall healthcare spending," said Blair Childs, executive vice president of AdvaMed, a Washington trade group representing medical device manufacturers.
Using only the cost to insurance beneficiaries as a measurement, the study failed to recognize that technologies might lower cost in other areas such as lost workdays, he said. "It talks about the increase in healthcare spending, but it doesn't talk about what we're getting for that. It only looks from the vantage point of spending and is not looking from the vantage point that patients are getting access to care they wouldn't otherwise have gotten," Childs said.
Some also were skeptical, wondering if the study was simply a ruse for denying patients access to high-cost procedures.
"I think with all the attention to the growth in health insurance premiums there's an attempt to explain why that's happening," said Carmela Coyle, senior vice president of policy at the American Hospital Association. "You need to be clear and separate about what's going on in the growth in health insurance premiums versus what's going on in underlying healthcare costs."
All in all, the study disclosed nothing new to Leonard Berlin, chairman of radiology at 254-bed Rush North Shore Medical Center in Skokie, Ill. Radiology literature has well documented the overutilization of radiology procedures, he said.
But the blame falls on referring physicians, not radiologists, he said. Some of that is due simply to "the lack of information and knowledge about the applicability and the need for these procedures," Berlin said.