The
Impact of Technology on Business and Clinical Health Care Costs
Abstract
This
paper will discuss how business and clinical health care costs have been
impacted by advances in technology. It will also discuss the social impact
related to these advances. It will seek to answer the questions, “Where health
care costs have increased or decreased because of technological advances.” How has
our society been impacted by health care technology changes and how will they
be impacted in the future?
Business
and Clinical Technology Definitions
In order to answer the question about whether technology
has increased or decreased health care costs we must define two distinct areas
of health care expenses:
#1. Business Technology: Frequently referred
to as the back office. This technology includes patient record keeping,
insurance filling/reimbursements, image data storage and retrieval (such as CT
Scans and X-Rays), appointment scheduling/reminder, billing, invoicing and
collections.
#2. Clinical Technology: This area is related to
software and hardware used to prevent, diagnose, monitor or treat diseases and
medical conditions. Some examples might
include newer CT scanners that scan the body at a more molecular level, robotic
equipment and software to assist with surgeries, technologies to use less
invasive laparoscopic surgeries, and the development of medicines and vaccines
to prevent communicable diseases.
Business
Technology
According to Rick Gilkey, executive director of the
Center for Health Care Leadership and a professor at the Emory University
School of Medicine, (http://knowledge.emory.edu/article.cfm?articleid=1244)
the medical industry has been fast to adopt and expand their usage of business
software. Technology has replaced manual prepared patient records and laborious
filling systems. Technology advances in business software has replaced paper
processes with more efficient digital process that allow for patient records to
be entered and retained electronically. This has improved office efficiencies
and effectiveness by making it easy to retrieve, track and keep patient records
up-to-date. An even bigger advantage is
the fact that clinicians spend less time manually entering and updating records
and are able to spend more time on actual health care services. Bill collection
has become easier to track and follow through. Newer hardware and
telecommunications technology makes it possible for clinicians to enter patient
data directly into the database as they work directly with patients.
These
improvements in software and hardware technologies have made it possible for
clinicians to store X-Rays and CT Scans electronically. Additional advantages
include the ability for primary physicians and hospitals to upload X-Rays, CT
Scans and patient records to specialists or follow-up care providers. This has
replaced the antiquated process of handling and filing large X-Rays and CT
scans and courier services to deliver important documents to other care
providers. Storing these images electronically has also reduced the cost of the
expensive equipment and consumable materials necessary for these processes. Specifically, the cost of silver, an element
of the film materials.
Improvements in security and Internet
capabilities now make it possible for health care administrative staff to file
insurance reimbursements electronically, business to business (BtoB). This has
decreased the amount of staffing, time and paper work required for the
insurance reimbursement process. The
main benefit of business technology is the time it saves clinicians so they can
perform more medical care and less administrative duties. This provided a clear indication that the advancement of
technology for the back-office has greatly reduced medical administrative cost
and made numerous efficiencies. However,
on the clinical side the impact has been quite different.
Clinical Technology
According
to the
A Kaiser Consideration
To understand the impact of technology on cost, it becomes
important to understand how technology affects health care costs. The Kaiser foundation published a
list of items that provides insight into the actions that affect cost. Their
list of items is below, (The Henry J. Kaiser Family Foundation (2007).
·
“Development of new treatments for previously
untreatable terminal conditions, including long-term maintenance therapy for
treatment of such diseases as diabetes, end-stage renal disease, and AIDS.
·
Major advances
in clinical ability to treat previously untreatable acute conditions, such as
coronary artery bypass graft;
·
Development
of new procedures for discovering and treating secondary diseases within a disease,
such as erythropoietin to treat anemia in dialysis patients;
·
Expansion of
the indications for a treatment over time, increasing the patient population to
which the treatment is applied;
·
On-going,
incremental improvements in existing capabilities, which may improve quality;
·
Clinical
progress through major advances or by the cumulative effect of incremental
improvements, that extends the scope of medicine to conditions once regarded as
beyond its boundaries, such as mental illness and substance abuse.”
Kaiser also included a comprehensive discussion on factors that
influence whether a new technology will increase or reduce health care
spending.
“Does the new technology supplement existing treatment, or is it a
full or partial substitute for current approaches? Do these changes result in
higher or lower health spending for each patient treated? In looking at the
impact on cost per patient, consideration needs to be given to whether the
direct costs of the new technology include any effect on the use or cost of
other health care services such as hospital days or physician office visits. A
second factor is the level of use that a new technology achieves (i.e., how
many times is the new technology used?). Does the new technology extend
treatment to a broader population? Examples would be innovations that address
previously untreatable illness, diagnose new populations for existing
treatments, or extend existing treatments to new conditions. New technologies
can also reduce utilization – for example, new screening or diagnosis capacity
that allows more targeted treatment. There also are temporal aspects to
evaluating the impact of new technologies on costs. Some innovations, such as a
new vaccine, may cost more immediately but may lead to savings down the road if
the vaccine results in fewer people seeking more expensive treatment. New
technologies also can extend life expectancy, which affects both the type and
amount of health care that people use in their lifetime. “
Social and Economic Factors
Many social and economic factors influence technology advances. As with any industry, consumer demand is at
the fore front. In the
As health care costs continue to rise the impact on the divide
between who does and does not
receive
medical care continues to increase. As
costs rise, insurance premiums increase. This has a spiral affect on who can
and cannot afford medical care insurance. As insurance premiums increase, large
business reduces the amount of insurance coverage it provides or passes on
higher premiums to it’s employees. This further increases the divide between
who can afford the advantages of new health care technologies and who cannot.
Creating a scenario where only the top end of the economic structure can
benefit.
Health Care Spending In Comparison to Other Industries
In
2007 The Henry J. Kaiser Foundation provided an overview of health care
spending in comparison to other industries. Once health care and education spending
in the
“ An estimated $111
billion was spent on
If Medicare goes bankrupt, in 9-years, as predicted because of
increased health care costs, who will pay for the health care needed for these citizens?
Or, will they be left with no health care because of their economic situation?
Extending Life
Expectancy
Another factor is the impact of technology on extending life
expectancy. Due to the extension of life expectancy patients will spend more on
health care over the course of their life than in 1970. This again, is an
impact of technology on health care costs.
More people are spending more on health care for a longer period of
time. As we approach a time when the majority of our population will be over
the age of 50 there becomes the question on whether money should be spent on
health care costs or assisted living? Should
we seek to further extend life or improve the quality of life?
The issue of quality of
life versus quantity of life is another area where technology is
unthrottled. Research centers and
industries are free agents to develop technologies at will. Since the consumer
is the driver of health purchasing there is still a high demand for
technologies that extend life. However,
at some point in time we must consider the quality of an extended life. Should health care dollars be spent on technology
to improve the quality of life or to extend the quantity of life?
The
Future
As health care costs continue to rise, the void between
the “Haves” and the “Have Nots” will continue to increase. As a society, we
will need to determine how we want to handle technology, it’s introduction, the
cost associated with that advancement. Furthermore, we will need to determine
where the best place is to spend our technology dollars (preventive care,
quality of life or extended life).
In
Conclusion
Technology advancement
that occurs to quickly drives up cost. While we all want the advantages of good
health care, technology introduced too quickly, drives up cost and impacts how
many in our society will be able to take advantage of that health care. We need
to come up with a solid plan within our society to target the key most
important technology advances and develop a means for implementing them in a
cost effective manner so the maximum number of citizens can benefit.
References
Callahan,
Daniel, (2008). Health Care Costs and
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Gabriel I, M.D., MP.P.H. and Glied, Sherry A., Ph. D., (2010) New Technology and Health Care Costs – The
Case of Robot-Assisted Surgery, in
The New England Journal of
Medicine: , August 18, 2010. Retrieved
from //http://www.nejm.org/doi/full/10.1056/NEJMp1006602
The
Henry J. Kaiser Family Foundation (2007). How
Change in Medical Technology Affect Health Care Costs, in Kaiser Health News: Snapshots:
Health Care Costs. Retrieved from http://www.kff.org/insurance/snapshot/chcm030807oth.cfm
Bates,
David W. (2002). The Quality case for
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Jamal, Aziz, McKenzie, Kirsten, Clark, Michele
(2009). The Impact of Health
Information Technology on the Quality of Medical and Health Care: A Systematic
Review, in Health Information Management
Journal, Vol 38, No. 3 2009,
ISSN: 1833-3583 (PRINT) ISSN 1833-3575 (ONLINE).