This is module 1.2.3, the Impact of New Technology. In the previous few lessons, we've discussed who may be interested in technology assessments, and why it's important that technology assessments are performed, because of the context of the healthcare industry. In this lesson, we'll discuss why health care technology, and understanding the impact of new technology, is so important. So in the economy, in the United States, health care accounts for a significant portion of the economy. And it's increasing. In the year 2000, health care accounted for about 13% of GDP. By 2013, it had accounted for about 17.4%. In 2013, US health care expenditures were 2.9 trillion. Which is about $9,000, actually over $9,000 per person in the US at the time. And, health care spending continues to grow. The growth rate in 2013 was 3.6%. Clearly, health care in the US is a large portion of the economy and growing, and this is true in other countries as well. If we look at how that cost breaks down over sectors within the US, we see that a large portion is paid for by the government. Additionally, businesses and households pay a large portion combined, although either of their own portions is not small. And much of the government spending is funded by taxes imposed on businesses or households. And there's some small amount of other funding from charitable organizations or other types of Agencies that don't fall under one of these three categories. But clearly, everyone in the US has a significant interest in health care costs because everyone in the US is paying for them. So, what is the impact of medical technology? Well medical technology could be considered an investment if it's cost-saving or improves outcomes. At the same time, new technology may increase costs because the new technology is applicable to a new patient population, so demand goes up Or, it results in a longer life without increased productivity. So, if a new technology keeps people alive, but keeps them alive at a very unhealthy state, it may result in increased costs, because they're alive but not able to contribute to the economy. Alternatively, new technology can decrease costs, if new technologies achieve the same or better results as the current technologies but for less money. Or they can decrease costs if they result in longer life with increased productivity. So, the new technology may be more expensive than the current technologies, but it results in a longer life and people are able to contribute to the economy, therefore producing more wealth that offsets the increase costs in the future. So then the question is, is new technology worth it? And the answer is, it depends on the technology. And that's where health technology assessment comes in. We can consider two simple examples that have been discussed in published literature. One is birth technology. So, lifetime spending on low birth weight babies increased about $40,000 over the course of 40 years, from 1950 to 1990. However, over that same period, infant mortality rates fell by about 72%. So if we consider the length and quality of life of the improvements in medical technology, the rate of return for low birth weight infants was over 500%. In that sense, that was a great return on the investment. For heart attacks, over a much shorter time span, life expectancy after a heart attack rose by eight months, between 1984 and 1991. The cost of treating heart attack patients during that time rose by about $4,000. So one way to think about that is $4,000 resulted in an extra eight months of life. So some may say that, that extra investment in technology is not worth the resulting outcome. The point of the technology assessment, whether it's on heart attacks, low birth-weight babies, or any other medical technology, is not to make a value judgement about the importance of a new technology, but to obtain clear results that can be used to make decisions about what to do with the new technology. So whether it should be funded for continued research and development, what price it should be on the market, what patients it works for versus what patients it doesn't. There are many types of questions that medical technology assessments can answer and there's many stakeholders who have questions. Over the course of the remaining lessons in this module and the next, we'll discuss all the elements of the medical technology evaluation and why they're important.
