New drugs and technology increase health care costs


On top of the additional costs that result from health care worker shortages, we need to add on another whole set of costs that are basically unique to health care.

The third major cost driver for health care deals with new technology, new treatments, new procedures, and new pharmaceuticals that are introduced regularly into the American health care economy and care infrastructure. New is the key word. Health care is full of new developments.

New scanners, new devices, new treatments, and new pharmaceuticals are introduced every month into American health care. Go to any medical convention, hospital convention, and/or biotech convention and simply visit the exhibit hall to get a glimpse of the kind of "new" things that are being introduced to care.

Check out the "Clinical Technology Reference Guide", produced annually by the Health Care Advisory Board, to get a sense of new developments in the pipeline. The pipeline is full. New developments are developing daily. These new developments and new approaches create both new care results and new care costs. Those "new care" costs are being introduced every year in addition to - and on top of - the normal inflation rates for current and existing patterns of treatment and approaches to care.

When new treatments, devices, or pharmaceuticals replace old drugs or devices, the new version typically both does more and costs a lot more. This is not a minor cost item. The Congressional Budget Office (CBO) recently estimated that at least 40 percent of care cost increases over the past decade have arisen from new approaches to care and new delivery tools.

New implants, transplants, procedures, prosthetics, and diagnostic tools emerge constantly - and they all add regularly both to the functional capability of the care system and the direct cost of care.

It’s very easy to understand why new drugs and new care techniques are emerging. People want better care. Care, we all know, has yet to achieve perfection. Not everyone is cured, saved, sufficiently enhanced, or fully repaired by current levels of care. There are lots of opportunities for improvement in many areas of care. Those improvements happen regularly in the American health care economy because the business model for funding technological improvements is extremely cash rich in this country.

There is currently a huge and very proftable market in America for many categories of new and improved care-related equipment, services, treatment devices, drugs, tests, and care delivery techniques. New treatments emerge constantly, and they are used when they become available, particularly if they generate more revenue for either hospitals or for the physicians who use each of the new approaches.

The use of new imaging and testing technology grows at an even faster rate when the caregivers themselves own the imaging or testing equipment and get to charge patients for the use of the machinery.

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This article was sent to us by: Stanley K. Lloyd at 01022011

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