Technological Change in Health Care

Evidence from the United States suggests that technological change is a key factor in understanding both medical expenditure growth and recent dramatic improvements in the health of people with serious illnesses. Yet little international research has examined how the causes and consequences of technological change in health care differ worldwide. Seeking to illuminate these issues, this volume documents how use of high-technology treatments for heart attack changed in fifteen developed countries over the 1980s and 1990s. Drawn from the collaborative effort of seventeen research teams in fifteen countries, it provides a cross-country analysis of microdata that illuminates the relationships between public policies toward health care, technology, costs, and health outcomes.

The comparisons presented here confirm that the use of medical technology in treatment for heart attack is strongly related to incentives, and that technological change is an important cause of medical expenditure growth in all developed countries. Each participating research team reviewed the economic and regulatory incentives provided by their country's health system, and major changes in those incentives over the 1980s and 1990s, according to a commonly used framework. Such incentives include: the magnitude of out-of-pocket costs to patients, the generosity of reimbursement to physicians and hospitals, regulation of the use of new technologies or the supply of physicians, regulation of competition, and the structure of hospital ownership. Each team also reviewed how care for heart attacks has changed in their country over the past decade.

The book will be of enormous importance to health economists, medical researchers and epidemiologists, and policymakers.

Mark McClellan is Associate Professor of Economics and of Medicine and, by courtesy, of Health Research and Policy, Stanford University. He is a National Fellow, the Hoover Institution. Daniel P. Kessler is Associate Professor of Economics, Law, and Policy in the Graduate School of Business, Stanford University, and a Research Fellow, the Hoover Institution.