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Panel: Medical Technology Behind High Health Care Costs

By Claire Leavitt, CQ Staff

October 15, 2008 -- Medical technology is the main culprit behind soaring health care costs and physicians should take a closer look at how it is used, said health care experts Wednesday during a discussion on a new report examining how to curb rising costs and expand health coverage for the uninsured.

According to the report by the Center for Studying Health System Change (HSC), "technological change is the most important driver of spending increases over time," while the aging U.S. population "plays only a minor role," said the report, authored by HSC President Paul B. Ginsburg.

"Technology is the main cost driver," said Robert S. Galvin, director of Global Healthcare for General Electric. "We have to make the brave statement that some—though not all—technology is great," Galvin said during the briefing held by the Robert Wood Johnson Foundation.

"Not all technology is worth it," he added. Cost is derived from "price and use—it's the physicians that have the most to do with how [technology] is used," Galvin said.

Len Nichols, director of the Health Policy Program at the New America Foundation, said, "Technology is number 1, but we have to get smarter about its application. Once we get a new technology, we overuse it like crazy. There are just too many MRI machines out there."

Meanwhile, medical malpractice lawsuits and unhealthy lifestyles are not behind spiraling costs, some experts said.

"If we think wellness is going to solve Americans' health care problems, it won't even come close," said Robert Laszewski of Health Policy and Strategy Associates LLC. Laszewski, citing the report's findings that while reduction in obesity levels will reduce spending in the short term, said that costs will increase in the long run thanks to the subsequent rise in life expectancy and exposure to other, more dangerous illnesses.

Despite the rising cost of health insurance, "employers are committed—commendably—to providing health insurance," said Laszewski, who criticized Republican presidential candidate John McCain's proposal to eliminate the employer-tax exclusion and provide families and individuals with $5,000 and $2, 500 tax credits, respectively.

"The McCain plan would provide incentives to move people away from employer-based health care," Laszewski said, adding that employers are, on the whole, not interested in deviating from the current system. McCain has said that his plan will give Americans more choices for their health coverage than they have now, increasing competition and reducing health costs.

Panelists agreed that cost is not the only, nor most important, issue the system faces, referring to the country's 47 million uninsured. While many agree that universal coverage will come with a high price tag, it's "well worth doing" simply for ethical reasons, said David Nexon, senior executive vice president of the Advanced Medical Technology Association (AdvaMed).

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