Semi-Daily Journal

Just curious -- why aren't advances in medical technology also reducing cost? In, say, (to use a very hackneyed example) information technology, technology has given us more to offer, but cheapened unit costs. In medicine, though, the "more to offer" part has come, but the lowered costs per unit of stuff gotten haven't. Sure, it makes sense that the "marginal medicine" that increases a cancer patients life expectency from 6 months to 9 months is going to be very expensive in the three-month increment, but leaving aside the costs of medicine from the 76.5th year to the 76.75th year, it doesn't seem like advancing medical technology cheapens medicine any in the 0th year to the 76.5th year. (yes, I know I'm using life expectency as a proxy for medical technology inappropriately, and that the quality of life that medicine can bring is also important and expensive. Still, it doesn't seem like medicine is getting any cheaper for a GIVEN quality of life and for a GIVEN life expectency. Why?)

A very good question. Some medical care advances are reducing costs (laprascopic surgery, for example). But technological progress in medical care seems overwhelmingly to be of the "do new things in a very expensive way" variety, rather than "do old things much more cheaply"...

Julian,

> it doesn't seem like medicine is getting any
> cheaper for a GIVEN quality of life and for
> a GIVEN life expectency. Why?

Because the health care system simply is not geared toward producing less expensive health care for a given life expectancy. Instead, the system works very hard on increasing life expectancy, which in practice means first and foremost extending life expectancy of a senior citizen. Extending life expectancy of a senior citizen, however, has some social cost repercussions. Simply (and somewhat cynically) put, first, industrialized nations spend a lot on getting better at treating cancer; then, they spend a lot on long-term care for seniors who wouldn't survive their cancers twenty years ago. Long-term care competes for resources with the rest of the health care system, which keeps resource prices (and the cost of health care) high...

I don't know what was passing through my head at the moment, but I thought this title read "Long- Term Motherfucking" or "Long-Term Fucking."

How much does medical technology, or medicine in general, for that matter actually increase average as opposed to marginal life expectancy? Does anyone know how the average life expectancy Christian Scientists compares to other groups? I’m not sure we are gaining ground on the life expectancy front at all.

It seems to me that while medical technology advances, the general quality of medical care is actually declining. My doctor friends complain that nurses and medical technicians are much less competent today than they were 10 or 20 years ago. For one thing, today many nurses are recent immigrants from third world counties and don’t have good English skills. Consequently they can’t communicate patient data accurately. My radiologist friend says that now 100% of his oral reports are transcribed incorrectly, whereas 10 years ago only 2% were. Medical errors are a very serious business and we might be seeing a misallocation of capital. Too much technology and not enough attention to basics.

I'm going to wait and worry about that more when there is a bigger arsenal of antibiotics and maybe also when they get the mrsa problem in hospitals nuked or taken care of with something, or when the worldwide medical community shows a better response than what happened with SARS.

Also lacking is exactly what is the 40, 50, 60 etc. survival rate, say of the upcoming baby boomer generation, as compared to previous. At my last high school reunion it seemed to me that the deaths were high- drug overdoses, suicides, accidental death, and cancer, but I don't know if it is higher or lower than other areas or other age groups.

Information technology is fundamentally about the automated and semi-automated processing of information by computers, often in the service of producing something else. So first, the fact that the underlying technology has improved its number-crunching per unit cost by many orders of magnitude, has led to lots of good-but-cheap uses of the technology. And second, while spending on IT _has_ increased significantly, this isn't seen as a "ballooning cost" because it allows other resources to be used more efficiently, thus helping to keep down the end price of goods and services.

Medicine on the other hand is intensive in labor and research, and is mostly an end product rather than a contributor to producing other things. (Better health care can make people more productive, but most of the expensive stuff may contribute a lot to quality of life but is likely not even close to a productivity win). So first off, increasing technology doesn't slash costs because they remain intense in skilled labor or medical R&D. So for example even with something like Lasik that has become very mass-market, costs have dropped quite a bit but won't drop much further because of the minimum labor requirements for surgical techniques. And second off, increased spending becomes a direct increase in end-product cost rather than an increase of one input to a production process.

Do other countries with predominantly publicly financed health care systems experience the same sort of explosive inflation in health care as the U.S.A.? Comparative data would be good to know here, especially if controlled for demographics. It seems to me that, if health care costs are to be contained, one needs system-wide data on both the distribution of syndromes and the efficacy and cost of treatment outcomes, but also some sort of publicly sanctioned authority to make decisions about trade-offs in optimizing overall health outcomes at given cost-constraints. Whether you call it cost/benefit analysis or triage, at some point, decreasing marginal gains from treatments must meet with increasing marginal costs, while coming against considerations of equity, as well. Vis-a-vis the illimitable demand for health care, especially on the part of the sick and the dying, and the "heroic" autonomization of the institutions of the medical profession geared toward maximalization of high standards of care, there is an incommensurable trade-off in values with economic and fiscal soundness, as well as, social balances in the goods of life. Whereas a market driven health care system may, in fact, tend to produce more technological innovation in treatments, provided the recipients can afford the costs, this does not guarantee that the marginal gains from such innovations will be large, nor well-distributed. One of my favorite quotes about technology is from the Swiss writer Max Frisch: "Technology is the art of so arranging the world that we don't have to experience it." With an aging demographic, perhaps our natally inherent inexperience of death needs to be reconsidered.

Brad:>>progress in medical care seems overwhelmingly to be of the "do new things in a very expensive way" variety, rather than "do old things much more cheaply"...>> I would tend to think that the "do things much more cheaply" dominates in volume terms, but we tend to ignore it just because it is cheap and simple. Attention is easily drawn to the new and expensive. And don't forget that there is a lot of "doing old things as expensive as always", the ancient handcraft of cleaning, feeding, combing, consoling, sootheing will always be there to be done..

I think we still have some magic bullets to look forward to. Sure these will allow more people to live long enough to have other problems. But I could still see major cost savings from medications for heart disease, cancer, obesity, and MS and other autoimmune type diseases which go right to the source.

Right now we go after many problems in such a blunt fashion that the cure involves many complications, or the cure is so incomplete we start chasing secondary problems. So if you have heart disease or cancer it's a pretty good chance that you're going to be cut open and exposed to further risk and then face a recurrence. The recently released report of arteries being unclogged by HDL cholesterol shows how we might eventually shift from a constant battle with plaques, heart attacks, strokes, and high blood pressure to a mass produced preventative measure which applies to the majority of patients.

Prof. Delong,

What is your to read list at the moment?

My question is how much of the increase in cost of medicine is due to technology improvement and
how much is due to to the point that the system is so inefficient.

We have a system where we have more administrators
than Drs. and nurses. The rough statement I make is that the health care system spends $25 in administrative costs to prevent $1 dollar of waste. I know I have no data to support that ratio, but I am willing to bet that it is not unreasonable.

Different industries, even different countries, have varying patterns of innovation. One thing we can say for certain is that innovation in health care is dominated by research physicians and biochemists (drug companies).

There's little or no equivalent of the process engineer that in other industries would be working constantly to take the costs out of products as they became more standardized.

One place we might see this taking place is laser eye surgery, which is a competitive marketplace.

From an organizational standpoint, it seems to me that health care could be much more efficient and reliable, but the organization of the industry won't get us there.

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