Are new technologies really the reason for rising health costs?

Over the last four weeks I have written about new technologies and their coming impact on medical care. We generally think of new technologies (and new, branded drugs) as pushing up the cost of healthcare. There is truth to this contention, of course, but often the real problem from a cost perspective is inappropriate use. And this happens all to often in medical practice today because the physician does not have (or perceives he or she does not have ) the required time for a more complete history and some thought time to figure out a patient’s problem.

The result is a quick reflex to send the patient for an imaging study, for additional laboratory tests or to a specialist – who in turn will order tests, imaging or even a procedure. The other quick reflex is to prescribe a drug when lifestyle changes might be more appropriate – say a statin instead of diet change, an H2 blocker instead of a diet change, bed blocks, reduced caffeine, etc. These happen to all patients but it is especially an issue for patients with complex chronic illnesses – diseases that once developed like heart failure or diabetes, are life long. Indeed it is with these patients that some 80% of medical costs are concentrated.

When, instead, the patient has a primary care provider that has (or takes) the time to carefully evaluate each issue and who is adept at coordinating with needed specialists, the costs of care go way down. Patients end up with many fewer prescriptions, fewer tests and fewer referrals to specialists. Of course tests, imaging, specialists and procedures are often appropriate and indeed critical. This point is to limit them to those who really need them. This not only reduces costs but improves safety and quality. It also improves patient satisfaction.

But primary care physicians are frequently in an unsustainable business model, one where reimbursement has been held constant, gone down some or gone up just slightly whereas office expenses and insurance costs have risen routinely each year. The PCP makes up for this by seeing more patients (“make it up in volume”) for less time each. The result is a PCP who cannot give the time needed for really good preventive care or for close coordination of chronic illness care.

And this is driving more and more PCPs to no longer accept insurance, including Medicare and commercial products. They expect the patient to pay at the door just as was done a few decades ago. Or they have opted to have a retainer based practice where they limit the number of patients to about 500 thus guaranteeing the time needed to give really comprehensive care to their now fewer number of patients. Both of these options get the patient and the provider back to a more typical contractual relationship between professional and client. And it means that new technologies (or drugs) are used more appropriately and therefore with less cost to the system.

Are new technologies really the reason for rising health costs?Stephen C. Schimpff is an internist, professor of medicine and public policy, and former CEO of the University of Maryland Medical Center.  He consults for the US Army (where this material was first developed), medical startups and Fortune 500 companies, and is the author of The Future of Medicine — Megatrends in Healthcare and blogs at Medical Megatrends and the Future of Medicine.

Submit a guest post and be heard on social media’s leading physician voice.

email

Comments are moderated before they are published. Please read the comment policy.

  • Anonymous

    What’s really frustrating is trying to practice good geriatric medicine.  Fourteen patients is a very busy day, if you want to be thorough and provide excellent care.  Unfortunately, we are not reimbursed for our expertise or care, only for checking boxes.  

  • Anonymous

    I agree. Those who care mostly or entirely for geriatric patients (who generally have multiple chronic conditions) should probably not have more than about 400 patients under care. But the reimbursement system pushes the other direction. My prediction is that more and more PCPs will either decline to accept insurance and simply charge their patients a reasonable fee for the time required or switch to retainer based practices.
    Stephen Schimpff

  • Anonymous

    New technologies isn’t the sole cause for rising costs, the real cause is end-of-life health care. If there’s any place we should have strict standards, it’s regarding the heroics involved with end-of-life health care. Unless given strict orders contained in signed and witnessed documents, doctors will continue to sustain life at all costs. I can’t blame them, their malpractice insurers mandate it. If there’s any place we need Federal laws that cover the entire industry, it’s in the area of end-of-life decisions. Some will call it creating “death panels”. If that’s what you want to call it, fine! Death panels or not, strict end-of-life standards are needed to lower costs. After all is said and done, life can’t be much fun in a petri dish, right?

    • Anonymous

       Excessive and inappropriate end of life care is a real problem as you point out. Our culture pushes for “do more” by both doctors and patients (and their families) even when it is likely to be futile or when, say, a cancer drug might add just a few weeks or months, cause many side effects, and cost a huge sum of money. I am not certain that federal regulation is the way to deal with this. Better for each of us to develop our living will and be explicit about what we want and do not want. And it is important for our caregiver to have frank and honest conversations with us (and for us to request these conversations) about what options are or are not available. Good palliative care programs can make a big difference as well although not enough physicians, in my opinion, request the palliative care team to see a patient when it would be most valuable.
      Stephen Schimpff

  • Anonymous

    It’s multifactorial to include not only technology. Greed of doctors doing tests and procedures, liabilities leading CYA practice, ambiguity of end of life care and many more.

Most Popular