Renowned economist touts benefits of medical technology in controlling health care costs, increasing productivity

Published: 03/18

LA QUINTA, CA, USA - (HealthTech Wire) - One of the nation’s most influential health care economists today highlighted the role of advanced medical technologies in managing costs and promoting greater productivity in the health care system.

Speaking at the Advanced Medical Technology Association’s (AdvaMed) 2008 Annual Meeting, Uwe Reinhardt, Ph.D., professor of economics and public affairs at Princeton University, stressed that medical technology will play a key role in containing health care costs. He estimated that at current projections, health care expenditures could account for 38 percent of the U.S. GDP (gross domestic product) by 2050.

Reinhardt explained that an often overlooked threat to the U.S. health care system is the “pervasive and growing labor shortage of health care workers which is driving up the per unit cost of health care.” He noted that in 1990 the ratio of heath care workers to elderly patients in the U.S. was 3.5 to 1 and that figure is expected to be halved by 2030.

Reinhardt pointed to the promise of medical innovations such as remote monitoring technologies for congestive heart failure and diabetes, implantable neurostimulators for conditions ranging from migraines to Alzheimer’s Disease, and hip and knee replacements that restore mobility, as examples of “labor-saving technologies” that will not only increase the efficiency and productivity of a shrinking pool of health care workers, but help the elderly remain active and productive as well. He pointed to the need to harvest the vast potential of IT to transform the health care system the way it has other industries such as finance and communications.

Reinhardt also discussed the challenge of what he referred to as the “widening income distribution in the U.S., which makes it ever harder for families in the bottom 30 percent to 40 percent of the nation's income distribution to afford modern American health care, including the many wonders the members of AdvaMed invent and produce.” He further stressed that this income disparity argues the need for enactment of comprehensive health care reform, a position reflected in AdvaMed’s own health care reform plan.

“I want to thank Dr. Reinhardt for his thought-provoking discussion on some of the key challenges facing the U.S. health care system,” said AdvaMed President and CEO Stephen J. Ubl. “Through earlier detection and more effective treatments, the diagnostics and devices produced by AdvaMed’s member companies offer real solutions to these challenges.”