New Technology Actually Increases Medicare's Expenditures

According to a relative recent study done by researchers from the RAND Corporation, newly developing medical technologies will drive up the cost of health care by billions of dollars over the next decade. The research team evaluated a complex model of Medicare annual expenses and predicted the cost that 10 new medical technologies would have on the system. Their study found that if only half of the patients with heart failure receive implantable cardiac defibrillators then Medicare costs would increase by 4%, or $14 billion, over the next ten years. The other technologies have similar outcomes.

The problem lies, ironically, with the fact that all of these new medical technologies are allowing people to live longer lives. Under the current model of Medicare increasing the lifespan of the populous will increase Medicare cost drastically as living longer does not necessarily mean living healthier, or cheaper. Quoting the conclusion of the study, “ultimately, society faces it greatest spending risk not from demographics and health trends, but rather from medical technologies.”

In response to the study, dean for social sciences at Harvard University, David Cutler, pointed out that the study does not include the lowered costs for services that doctors will now be able to provide. While it is true, according to Cutler, that most of the technologies mentioned in the report will come to pass, and in all likelihood they will drive up the cost of Medicare, the savings from services that the new technologies provide should more than offset the extra cost.

http://www.medicalnewstoday.com/articles/31185.php