It is a common thought that increasing innovation in healthcare drives increasing prices in healthcare. On the surface this seems reasonable. The construction, implementation, and usage of advanced scanning equipment is expensive. If one is going to use it one has to pay for it. It is considered true throughout Europe, where most single-payer systems also have cost-control mechanisms designed to reduce healthcare innovation and ration the deployment of new ideas which prove to be considered necessary.
However, one finds aberrations when considering this logically and when comparing it to other industries. In no other industry does innovation lead to higher costs. Innovation typically leads to lower costs. New procedures, methods, and devices will in all other industries lead to higher efficiency or better outcomes. That is a major reason why governments worry so much about ‘high tech industries’. It isn’t the fact that those industries are new and recent. It is the fact that those industries are sources of innovation both in themselves and to the surrounding economy. And of course it goes without saying that this concern is the reason why wise governments look at their economy from the viewpoint of how well it encourages new ideas to be thought of, tested, and implemented. Even ‘low-tech’ industry sees benefits from new ideas and new equipment.
Furthermore, many medical innovations represent a significant lengthening in the capital structure of medical care, and should represent a concomitant increase in specialization. Increasing specialization and distribution of labor is another area in which most industries find increasing efficiency. Where demand is sufficient to sustain the higher output levels, having two factories where one produces only tires and the other produces the rest of the car is more efficient than only having one factory and having it produce the entire car. In practice, car production is a field sufficiently in demand* that the labor is usually split between many factories, with separately produced component being brought together to a plant which specializes not in car production so much as car assembly. In the field of medicine, the specialization represents taking load off of doctors and refining the specificity of diagnosis. It reduces or should reduce the cost of training doctors while improving outcomes, and more specific diagnoses should reduce the costs and risks of treatment. Thus we see improved efficiency… or we should. Especially we should since there is little question over whether or not there is demand sufficient in healthcare to support a highly specialized system.
Yet the argument is made that we don’t. The conventional wisdom is that diagnostic hardware is used defensively to avoid lawsuits. Worse, some argue that such equipment is used explicitly to run up costs and justify higher prices. I don’t know the source of this hearsay. Perhaps it stems from legitimate points and there is some valid difference between healthcare and automobile production. I suspect, but cannot prove, that if there is such a valid difference, it stems from the fact that even in this age of nationalized automobile plants, the provision of healthcare is more harshly restricted by the government than is the provision of automotives.
This is unfortunately the present limit of my knowledge on this topic. I will continue to study the matter, and of course, I will report on my findings with links to informational sources as I find them. Until then, I urge everyone to look at news on healthcare topics skeptically. There are a great many problems with government healthcare control systems. The risk that they will squash innovation is one of them and it is a very strong one. It is quite likely that the government will consider healthcare innovation to be a cost-risk and that they will not consider the matter much more deeply than that. Even if it is true that present technologies cost more than their value, will that be true of later technologies as well? And what if the conventional wisdom is wrong?
I would be grateful to anyone who offered information and links.
*The fact that healthcare is so necessary and unavoidable should also have it sufficiently in demand to drive as many kinds of specialization and capital investment as humanity can come up with. In other industries, that kind of persistent demand has traditionally lead to great efficiency. Brickmaking, for instance, mechanized earlier and faster than most industries because bricks have historically been a good with steady demand and large volumes required. A similar story exists for clothing, especially ‘work-type’ clothes worn during strenuous activities.