Cost of Medicine: Are High-Tech Medical Devices and Treatments Always Worth It?

Many expensive medical tools are valuable but arguably overused.

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Americans adore technology. We love our iPods, our Kindles, our TiVos, our Xboxes, and our smartphones. So it's no surprise that our high-tech infatuation extends to our medical system, where we zap prostate cancer in multimillion-dollar proton-beam therapy centers, implant defibrillators in chests to shock hearts back to life, use robots to perform surgery, and take detailed pictures of every part of our bodies using constantly advancing imaging technology.

The trouble is, we really can't afford it. Experts say that spending on new health technology—not just fancy machines but also drugs, devices, and procedures—makes up as much as two thirds of the more than 6 percent annual increase in healthcare costs (this year's costs: $2.5 trillion). "It's one of the key reasons why U.S. healthcare is so expensive," says Winifred Hayes, founder and CEO of Hayes Inc., a health technology research and consulting firm. The problem isn't usually the technology itself but rather its use in certain patients where it hasn't been shown to help more than cheaper options do—or at all.

Several forces are driving this excess use of high-tech medicine. The most commonly cited: "technology creep." First, a device, say, gets approved for a high-risk population in which there's a proven benefit. But its use then expands to lower-risk groups, changing the calculus of clinical and financial risk and reward. "I don't think we have a lot of technologies that aren't useful," says Paul Ginsburg, president of the Center for Studying Health System Change. "Our issue is that some of them are valuable but applied too broadly."

Take the implantable cardioverter-defibrillator, a battery-operated device that is surgically implanted in the chest. "These were first used for people who had survived" cardiac arrest, explains Rita Redberg, a cardiologist at the University of California-San Francisco. "Now they're being used for primary prevention"—that is, in people who face some risk of cardiac arrest but haven't experienced it.

Overstated benefits. A paper published last year in the Journal of the American College of Cardiology suggested the benefits of ICDs have been overestimated and the risks probably understated. In primary prevention trials, about 90 percent of ICDs will never save a life, but recipients still get exposed to risks such as infection and unnecessary shocks, says Roderick Tung, a cardiologist at the University of California-Los Angeles. And at $30,000 each, ICDs are cost-effective only in patients most likely to suffer cardiac arrest, research shows.

Technology creep is also at work in imaging, where the number of CT and MRI scans charged to Medicare increased more than 15 percent annually between 2000 and 2004. Consider CT angiograms, which use multiple X-ray images to form a picture of blockages in arteries and can cost more than $1,000. The most accepted use is to evaluate patients in the ER with chest pain, says Redberg, but some physicians use them to screen people with no symptoms. Yet there's no solid evidence they prolong or improve the quality of life or that they're cost-effective, according to Steven Nissen, chair of cardiology at the Cleveland Clinic.

The odd economics of health also abet the spread of technology. Healthcare providers are paid for each procedure or service rather than for improving the total health of patients, which means there's an incentive to offer more tests and treatments. Hospitals, meantime, compete to attract doctors and patients in part by buying advanced tools, whether or not they're needed in the community. "Say Hospital A has a PET scanner and an MRI. If Hospital B in the same locale doesn't have them, Hospital B loses in reputation and volume," says Melanie Nallicheri, a partner and member of the global health team at management consultancy Booz & Co.

Once a piece of expensive equipment is in place, it will be used. Proton-beam therapy, a kind of radiation requiring an investment of as much as $150 million, has soared in popularity in recent years. "With the current regulations...you can use it for any malignancy that needs radiation," says Theodore Lawrence, chair of radiation oncology at the University of Michigan Medical School. It's being offered for pediatric cancers and certain rare tumors, which Lawrence feels is appropriate, but mostly for prostate cancer, for which it has never been compared in a head-to-head trial against conventional radiation treatments.