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PERSPECTIVE

To Use Technology Better

Abstract

 
Although technological innovation can improve health outcomes, the precise magnitude of the contribution and its value are not easily measured. The findings reported by Jonathan Skinner and colleagues temper the favorable conclusions reached by observing correlations between improvement in heart attack outcomes over time with spending on medical products and services. Improvements in health care depend not only on producing better technologies, but also on using technology better.

This observation prompted the question answered in different ways by David Cutler and Mark McClellan in a 2001 Health Affairs paper and now by Jonathan Skinner, Douglas Staiger, and Elliott Fisher: Has technological change in medicine been worth what it costs?² In most other industries, the market would answer the question. If too few consumers believe that a new detergent, toaster, or television is "worth it," it will fail. But a medical product or service can succeed even if it is worth only the fraction of its cost that insured patients pay out of pocket. For the authors of these papers, learning whether technological change is "worth it" is important for what it reveals about the effects of policies and market changes that influence innovation. In the words of Cutler and McClellan, the results of their analysis of the benefits of technological change in medicine "provide a valuable methodology for gauging the impact of health system change, such as the rise of managed care on consumer welfare."

Cutler and McClellan’s work builds upon a landmark article they coauthored on changes in the true cost of heart attack care.³ According to their earlier work, the usual methods of calculating changes in medical prices fail to account fully for improved quality of care, resulting in overestimates of the rate of medical price inflation. In their more recent Health Affairs paper, they quantify the value of changes in health that occurred in several conditions; the improvements in heart attack outcomes are the most dramatic.⁴

Skinner and colleagues offer additional approaches to evaluating changes in the outcomes of heart attack care. Both papers describe sophisticated, meticulous analyses of Medicare beneficiaries’ heart attack survival, using similar data and vast sample sizes, yet very different impressions of the value of technological change emerge from their work. What accounts for the apparent contradiction?

Despite the many similarities of these studies, the two sets of authors frame the question differently. Cutler and McClellan sought the answer to the following specific question: If the improvements in heart attack outcomes among Medicare beneficiaries over time could be attributed primarily to changes in the care they received, which in turn increased Medicare spending, did they represent a good value? During the period they studied, 1984–1998, the dissemination of thrombolytic therapy and revascularization contributed to both rising costs of care and better outcomes. Their analysis of Medicare Part A claims confirms that heart attack mortality improved over time for Medicare beneficiaries while Part A spending for heart attack care rose modestly. In a period when increasing numbers of Medicare beneficiaries were receiving care known to be cost-effective, any other result would be surprising. But to the extent that their method also credits Medicare Part A with benefits resulting from the use of other technologies that it did not pay for—such as cholesterol-lowering therapy, blood pressure medications, anti-platelet agents, and beta-blockers, in addition to outpatient services—the cost of achieving improved health outcomes is understated.

Skinner and colleagues replicate Cutler and McClellan’s analysis with an extension to 2003, working with more than 2.8 million records of beneficiaries with heart attacks. Their results suggest that the positive relationship between Part A spending and outcomes is not robust over time; survival among Medicare beneficiaries with heart attacks did not continue to improve after 1996, even though spending for the condition continued to rise.⁵ Of much greater significance are the results that emerge from analyses using a different approach. In addition to studying changes over time, Skinner and colleagues compare different regions of the country. If, as the time-series evidence from 1984–1998 seems to suggest, more costly and aggressive care is better, Medicare beneficiaries living in regions that spend more on care should have better outcomes. But they find the opposite. Outcomes of heart attack care are worse in regions that spend more Medicare Part A dollars per patient, and the trend is statistically significant. Furthermore, the regions that provide more costly care provide less-guideline-compliant, less-cost-effective care.

The last finding is critical to understanding the policy implications of analyses like these. Notwithstanding the possibility that methodological limitations of both studies, especially the inability to control for unmeasured differences in the severity of comorbidities and other patient characteristics, contribute to the disparate findings, these two groups of authors are asking fundamentally different questions. Cutler and McClellan find that heart attack outcomes have gotten much better, and the care represents a good value, on average. Within this average is a mix of some care that is highly cost-effective, some that represents poor value, and some that is not effective at all. The analysis by Skinner and colleagues strongly suggests that there is much variation in the outcomes and cost-effectiveness of heart attack care across regions. Their examination of the use of beta-blockers, aspirin, and reperfusion therapy confirms it. These results are consistent with cross-country comparisons; in a rigorously conducted multinational study of technological change in the treatment of heart attack, McClellan and colleagues reported that there was no consistent relationship between the rate of adoption of intensive procedures or spending growth and changes in heart attack mortality.⁶

Skinner and colleagues do not directly address the subject of technology policy, such as rewards to biomedical innovation or the returns to federally sponsored research. To do so would require a series of speculative assumptions. But their findings suggest that we should reexamine our approach to biomedical innovation. In nearly every disease area, we could use better treatments and better diagnostic approaches. For some diseases, like most cancers, dramatic improvements in outcomes are unlikely to occur without major investments in the development of new drugs, devices, and biotechnology products. As much as we would like new tools, though, Skinner and colleagues show that we haven’t mastered the tools that we already possess. The gains from more effective, efficient approaches to heart attack care, without using any medications or procedures that are not already available, would be enormous.

We have much to learn about promoting better medical care, and we should not underestimate the difficulty of the task. But in comparison to the money spent to develop new technologies, we spend a paltry sum on finding ways to improve the use of technologies we already have. According to a widely cited estimate, the average cost of developing a new drug—an average drug, not a breakthrough—was $802 million in 2000, or about $900 million in 2005 dollars.⁷ The entire 2005 budget for the only federal agency responsible for research on more effective care delivery, the Agency for Healthcare Research and Quality (AHRQ), was less than $320 million.

Encouraging both innovation and access to new technologies is the central challenge facing the U.S. health care system. If the cost of medical innovations is too high, only the well-insured—such as today’s Medicare beneficiaries—will have access to them. But as health spending rises, fewer and fewer people will have insurance, and swelling out-of-pocket payments will place some new treatments out of the reach of even the insured. A shrinking number of patients will then benefit from advances in care. New technologies can improve health, but unless we learn to use them better, we cannot expect to harness their value.

Editor's Notes

 
Alan Garber (garber{at}stanford.edu) is a staff physician at the Veterans Affairs Palo Alto Health Care System and the Henry J. Kaiser Jr. Professor and director of the Center for Health Policy and Center for Primary Care and Outcomes Research, Stanford University, in Stanford, California. He is also director of the Health Care Program of the National Bureau of Economic Research.

The work of Alan Garber was supported in part by the VA, the Homer Laughlin Fund, and Robert Wood Johnson Foundation Grant no. 050448. He is grateful to Douglas Owens for helpful comments.

NOTES

Top NOTES

 

1. According to the late medical historian Roy Porter, "The breakthroughs of the last fifty years have saved more lives than those of any epoch since medicine began." R. Porter, The Greatest Benefit to Mankind: A Medical History of Humanity (New York: W.W. Norton, 1997), 715.
2. D.M. Cutler and M. McClellan, "Is Technological Change in Medicine Worth It?" Health Affairs 20, no. 5 (2001): 11–29[Abstract/Free Full Text]; and J.S. Skinner, D.O. Staiger, and E.S. Fisher, "Is Technological Change in Medicine Always Worth It? The Case of Acute Myocardial Infarction," Health Affairs 25 (2006): w34–w47 (published online 7 February 2006; 10.1377/hlthaff.25.w34).[Abstract/Free Full Text]
3. See D.M. Cutler et al., "Are Medical Prices Declining? Evidence from Heart Attack Treatments," Quarterly Journal of Economics 113, no. 4 (1998): 991–1024.[CrossRef]
4. Cutler and McClellan, "Is Technological Change in Medicine Worth It?"
5. This finding is at odds with data for all heart disease and all ages. U.S. age-adjusted mortality from heart disease fell as much in the six years from 1996 to 2002 as it had from 1984 to 1995. See National Center for Health Statistics, Health, United States, 2005 (Hyattsville, Md.: U.S. Government Printing Office, 2005), Table 36.
6. M.B. McClellan and D.P Kessler, eds., Technological Changein Health Care: A Global Analysis of Heart Attack (Ann Arbor: University of Michigan Press, 2002).
7. J.A. DiMasi, R.W. Hansen, and H.G. Grabowski, "The Price of Innovation: New Estimates of Drug Development Costs," Journal of Health Economics 22, no. 2 (2003): 151–185.[CrossRef][Web of Science][Medline]

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