New Technology, Medical Advances Likely To Contribute to Growing Medicare Costs, Study Says

New medical technologies will improve health care and extend lives, but they also likely will increase the cost of Medicare, according to a study published Monday on the Health Affairs Web site, the AP/Las Vegas Sun reports. For the study, RAND researchers analyzed a detailed model of Medicare expenditures to predict the outcomes of a number of scenarios related to the emergence of 10 new medical technologies. According to the study, if half of patients with new cases of heart failure or heart attacks received implantable cardiac defibrillators, Medicare expenditures would increase by 4%, or $14 billion, over the next 10 years. Medicare expenditures also would increase by millions of dollars if researchers developed a medication that could extend life because more individuals would become eligible for the program, the study found. The study concluded, "Ultimately, society faces its greatest spending risk not from demographics and health trends, but rather from medical technologies." Dana Goldman, director of health economics at RAND Health, said, "This technology is valuable because it will improve health and extend lives. But we need to begin thinking about how to pay for it." However, David Cutler, dean for social sciences at Harvard University, said that the study does not consider new medical technologies that will allow physicians to provide services at a lower cost. "The technological changes that the RAND authors consider will likely come to pass, and they will drive up Medicare spending (often with good value). But there is enormous potential for cost savings as well, which we have the capacity to realize," Cutler said (Freking, AP/Las Vegas Sun, 9/25).

An abstract of the study is available online. Other related studies and perspectives also are available online.