Spending on Healthcare Technology Beneficial

Originally Published MDDI March 2004

NEWSTRENDS

Erik Swain

While spending on healthcare, including new medical device technologies, has risen substantially in recent years, a new study shows that the investment is justified.

From 1980 to 2000, every dollar spent on healthcare led to between $2.40 and $3.00 worth of health gains, according to The Value of Investment in Health Care, a report prepared by MEDTAP International (Bethesda, MD), for The Value Group, a coalition of seven health care trade associations, including AdvaMed (Washington, DC). 

“All too often, healthcare discussions seem to center on the substantial increase of per-person spending on healthcare … rather than the benefits of improved healthcare that the spending bought,” states the report, which was released in January. “A focus on costs merely as a problem overlooks the value that patients and society in general derive from improved health.”

U.S. healthcare expenditures per person rose from $2207 in 1980 to $4461 in 2000. But during that same period of time, the age-adjusted death rate dropped from 1039.1 per 100,000 to 872.0 per 100,000. Life expectancy rose from 70.0 to 74.1 for men and from 77.4 to 79.5 for women. The disability rate of people over 65 dropped from 26.2% in 1982 to 19.7% in 2000. And the number of days in the hospital declined from 129.7 per 100 persons in 1980 to 56.6 per 100 persons in 2000.

“These findings cannot and must not be ignored,” said Pamela G. Bailey, president of AdvaMed. “Through significant investment in research and development, medical technology has advanced to the point where it is transforming healthcare, helping us to dramatically improve lives and reduce healthcare spending. New medical technologies detect diseases earlier and offer new, more effective treatment options for leading causes of disability and mortality.”

The study examined four disease areas in depth and found that the costs of treatments were justified in all four—heart attack, type 2 diabetes, stroke, and breast cancer. They returned, respectively, $1.10, $1.49, $1.55, and $4.80 in health gains for every dollar spent. 

Among the key developments benefiting heart attack therapy cited were improved diagnostic imaging technologies, primary and conventional angioplasty with or without stents, and implantable cardiac defibrillators. These and other factors led to the age-adjusted death rate from heart attack dropping from 345.2 per 100,000 in 1980 to 186.9 per 100,000 in 2000. 

Type 2 diabetes advancements include better self-monitoring blood glucose kits and more accurate hemoglobin A1c tests. Because of the nation's obesity epidemic, death rates have increased from 18.1 per 100,000 in 1980 to 25.2 per 100,000 in 2000, but the report predicts that new medications and technologies will improve outcomes in the future.

Progress in stroke management is attributed in part to advances in surgical techniques such as carotid endarterectomy, early aneurysm surgery, and minimally invasive microcoil devices that treat brain aneurysms. Also, advances in brain and vascular imaging have enabled more rapid diagnosis and treatment. Mortality rates fell from 96.2 per 100,000 in 1980 to 60.8 per 100,000 in 2000.

Factors helping to curb breast cancer include performing more mammograms at earlier ages, less invasive diagnostic procedures such as stereotactic core needle biopsy, and breast-conserving surgery. Five-year survival rates jumped from 76.9% in 1980 to 86.6% in 1995, and death rates improved from 32.3 per 100,000 in 1980 to 25.4 per 100,000 in 2000.

In addition to AdvaMed, The Value Group includes the American College of Cardiology, the American Hospital Association, the Federation of American Hospitals, the Healthcare Leadership Council, the National Pharmaceutical Council, and Pharmaceutical Research and Manufacturers of America.

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