Relationship Between Technology Availability and Healthcare Spending


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Laurence Baker, PhD; Howard Birnbaum, PhD; Jeffrey Geppert, JD; David Mishol, PhD; Erick Moyneur, MA; Stanford University and Analysis Group, Inc., November 5, 2003. Health Affairs Web Exclusive.

Focus: To examine the relationship between growth in the availability of technology and expenditures.

Study Design: Multivariate regression analysis using data from a large, national group health plan for 1999 to 2001 and Medicare claims data.

Results:

  • The higher availability of diagnostic imaging equipment and facilities that perform cardiac procedures is associated with greater use of these technologies and higher costs. The results were weaker for the cost impact of the availability of sophisticated cancer care and neonatal intensive care units.
  • MRI and CT act as complements, that is, greater MRI availability is associated with higher CT use and vice versa. In contrast, an increase in the availability of coronary artery bypass graft surgery is associated with less angioplasty use and spending.
  • Areas with greater availability of diagnostic imaging and cardiac facilities appear to have lower prices for commercially insured patients (where prices are negotiated) but higher prices for Medicare patients (where prices are set by government regulation).



Full Study:
Final Report on the Relationship Between Technology Availability and Health Care Spending (PDF format, 588KB)

 



 

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