Cost Of Health Care
The cost of health care in the United States has increased almost exponentially during the last few years. What is fueling these cost increases? There are many factors driving up the cost of health care in the United States. However, experts in health care and health policy point to the development and diffusion of medical technology as the main cause for this increase.
But before entering a debate, there are a few things to make sure people understand: What is defined as medical technology? What factors affect the growth of the research and development of medical technology? How are these technological changes affecting health care spending and costs?We live in a time where medical technology is seriously contributing to people living longer …show more content…
Innovations such as magnetic resonance imaging (MRI), new highly effective drugs, improvements in surgical procedures such as organ transplantation, coronary artery bypass surgery, just to name a few, have completely transform our modern way of life and the standards of health care. The research and development of medical technology have given us enormous outcomes and benefits. It is a source of hope for the prevention, effective treatment, and cure of diseases. Unfortunately, just like any new product, the cost of developing these new technologies and treatments is extremely high. Plus, unlike other technology, medical technology generally does not decrease in price over time (Fuchs & Garber: …show more content…
Annual spending on health care increased from $75 billion in 1970 to $2.0 trillion in 2005, and is estimated to reach $4 trillion in 2015. As a share of the economy, health care has more than doubled over the past 35 years, rising from 7.2% of GDP in 1970 to 16.0% of GDP in 2005, and is projected to be 20% of GDP in 2015. The annual rate of inflation of expenditure on health care 2002-2004 was about 8.4%, which far exceeded the rate of inflation for all other items in the United States economy ("How Changes in Medical Technology Affect Health Care Cost": 2007).
Here in the United States, new medical technology is responsible for half of the growth in health care costs. As new and more effective medical procedures, drugs, and technologies are introduced into the market, the demand grows and more money is invested in them. The money is invested by the government, manufacturers, private investors, and in a minor scale by the health insurers. All the health care benefits and investments are the motivation for technological research and development to continue and accelerate in order to generate more profit (Fuchs & Garber:
But before entering a debate, there are a few things to make sure people understand: What is defined as medical technology? What factors affect the growth of the research and development of medical technology? How are these technological changes affecting health care spending and costs?We live in a time where medical technology is seriously contributing to people living longer …show more content…
Innovations such as magnetic resonance imaging (MRI), new highly effective drugs, improvements in surgical procedures such as organ transplantation, coronary artery bypass surgery, just to name a few, have completely transform our modern way of life and the standards of health care. The research and development of medical technology have given us enormous outcomes and benefits. It is a source of hope for the prevention, effective treatment, and cure of diseases. Unfortunately, just like any new product, the cost of developing these new technologies and treatments is extremely high. Plus, unlike other technology, medical technology generally does not decrease in price over time (Fuchs & Garber: …show more content…
Annual spending on health care increased from $75 billion in 1970 to $2.0 trillion in 2005, and is estimated to reach $4 trillion in 2015. As a share of the economy, health care has more than doubled over the past 35 years, rising from 7.2% of GDP in 1970 to 16.0% of GDP in 2005, and is projected to be 20% of GDP in 2015. The annual rate of inflation of expenditure on health care 2002-2004 was about 8.4%, which far exceeded the rate of inflation for all other items in the United States economy ("How Changes in Medical Technology Affect Health Care Cost": 2007).
Here in the United States, new medical technology is responsible for half of the growth in health care costs. As new and more effective medical procedures, drugs, and technologies are introduced into the market, the demand grows and more money is invested in them. The money is invested by the government, manufacturers, private investors, and in a minor scale by the health insurers. All the health care benefits and investments are the motivation for technological research and development to continue and accelerate in order to generate more profit (Fuchs & Garber: