Technology is the primary cause of our skyrocketing health-care costs. It could also be the cure.
Moores Law predicts that every two years the cost of computing will fall by half. That is why we can be sure that tomorrows gadgets will be better, and cheaper, too. But in American hospitals and doctors offices, a very different law seems to hold sway: every 13 years, spending on U.S. health care doubles.
Health care accounts for one in five dollars spent in the United States. Its 17.9 percent of the gross domestic product, up from 4 percent in 1950. And technology has been the main driver of this spending: new drugs that cost more, new tests that find more diseases to treat, new surgical implants and techniques. Computers make things better and cheaper. In health care, new technology makes things better, but more expensive, says Jonathan Gruber, an economist at MIT who leads a heath-care group at the National Bureau of Economic Research.
Much of the spending has been worth it. While the U.S. spends the most of any country by far, health care is becoming a larger part of nearly every economy. That makes sense. Better medicine is buying longer lives. Yet medical spending is so high in the U.S. that the White House now projects that if it keeps growing, it could, in 25 years, reach a third of the economy and devour 30 percent of the federal budget. That will mean higher taxes. If we cant accept that, says Gruber, were going to need different technology. Essentially, its how do we move from cost-increasing to cost-reducing technology? That is the challenge of the 21st century, he says.
That is the big question in this months MIT Technology Review Business Report. What technologies can save money in health care? As we headed off to find them, Jonathan Skinner, a health economist at Dartmouth College, warned us that they are as rare as hens teeth.
In an essay well publish this week, Skinner explains why: our system of public and private insurance provides almost no incentive to use cost-effective medicine. In fact, unfettered access to high-cost technology is politically sacrosanct. As part of Obamacare, the governments restructuring of insurance benefits, the White House established a new federal research institute that will spend $650 million a year studying what medicine works, and which doesnt. But just try finding out if any of it will be any cheaper.
According to the law that created the institute, its employees cant tell you. The institute, a spokesperson told me, is forbidden from considering costs or cost savings. Its not cynical to speculate why. Five of the seven largest lobbying organizations in Washington, D.C., are run by doctors, insurance companies, and drug firms. Slashing spending isnt high on the agenda.
For cost-saving ideas, you have to look outside the mainstream of the health-care industry, or at least to its edges. In this report we profile Eric Topol, a cardiologist and researcher who is director of the Scripps Translational Science Institute in San Diego and who once blew the whistle on the dangers of the $2.5 billion heart drug Vioxx. These days, Topol is agitating again, this time to topple medicines entire economic model using low-cost electronic gadgets, like an electrocardiogram reader that attaches to a smartphone.
By brandishing his iPhone around the hospital, Topol is making a statement: one way to fix the health-cost curve is to harness it to Moores Law itself. The more medicine becomes digital, the idea goes, the more productive it will become.
Thats also the thinking behind the U.S. governments largest strategic intervention in health-care technology to date. In 2009, it set aside $27 billion to pay doctors and hospitals to switch from paper archives to electronic health records. The aim of the switchovernow about half finishedis to create a kind of Internet for medical information.
Read more here:
We Need a Moore’s Law for Medicine
