2005 Impacts of Advances in Medical Technology- Productivity Commission

2005 Impacts of Advances in Medical Technology- Productivity Commission

• Advances in medical technology have brought large benefits but have also been a major driver of increased health spending in recent years.
– In many cases, increased expenditure on new medical technologies reflects improved treatment and a significant increase in the number of people treated.

• Overall, advances in medical technology arguably have provided value for money — particularly as people highly value improvements in the quality and length of life — but the cost effectiveness of individual technologies in practice varies widely and for some is simply unknown.

• Variations in cost effectiveness, and relatively low use by some demographic groups, suggest scope for expanding use of some technologies and possibly reducing use of others to increase net community benefits.

• Better coordinated, more systematic health technology assessment (HTA) with transparent objectives, underpinned by the principle of enhancing overall community wellbeing, would be a good step forward. HTA can help to target use of new technologies and promote overall cost effectiveness of healthcare spending.
– Evidence and needs based access to new technologies is preferable to existing, often blunt, rationing mechanisms.
– Systematic reviews of efficacy and cost effectiveness of new technologies once they are in use could promote overall cost effectiveness of healthcare, without unduly delaying their introduction.
– Greater procedural transparency and community involvement in HTA have the potential to foster greater acceptance of technology funding decisions and to help ensure that HTA is not used simply to restrain expenditure.

• The next decade or so could see the emergence of revolutionary technological advances based largely on knowledge of the human genome. Many are expected to provide significant benefits to the Australian community, but at significant cost.

• Such technological advances, interacting with (and encouraged by) increasing demand for health services driven by income growth, accelerating population ageing, community expectations that new technologies will be accessible to all, the commitment of doctors to offer the best-available treatments, and subsidised consumer prices, will make for a potent mix, placing increasing pressures on the private and public health systems.

• These pressures underscore the need for better information about the costs and benefits of technology. But technology is only one input in healthcare. Problems related to technology use often reflect broader structural, incentive and resourcing issues in the health system.

• There is a pressing need to explore what the community considers is an appropriate level of subsidised access to healthcare and the technology it embodies, and the
institutional and incentive structures that will deliver it efficiently and equitably.

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