New Study Challenges Conventional Wisdom on Medical Technology and Health Spending

A recent study illustrates how medical technology isn’t necessarily the low-hanging fruit for federal spending cuts that some lawmakers think.

• The Journal of the American College of Radiology’s July issue reported new research on medical imaging tests.
• A Neiman Health Policy Institute study examined whether this kind of medical technology’s use has driven Medicare costs.  Researchers looked beyond simply Medicare claims data to doctor decisions when seeing patients.
• Results of this research should be a cautionary tale in Washington’s budget-cutting environment.
• While beyond the focus of this study, many times the more expensive medical technology produces better diagnostic helps.  And that qualitative difference can save money in the long run.

Digging deeper shows that doctors don’t liberally order diagnostic tests for Medicare patients.  The picture contains much greater detail than a simple spending-level analysis indicates.

• In 2003, 12.8 percent of Medicare patient exams by their doctors resulted in an imaging test being ordered.  That year, Medicare spent $294 per patient.
• By 2011, 10.6 percent of Medicare doctor visits included medical imaging.  Medicare spent $390 per beneficiary that year.
• In 2006, just after the Deficit Reduction Act took effect, per-enrollee Medicare spending reached $418 for the year.  That law cut diagnostic imaging payment rates for Medicare.
• Researchers said there’s more to this picture than just spending levels.  They wrote that “spending alone is … an incomplete measure of changes in the role and utilization of medical imaging in overall patient care.”
• Study coauthor Danny Hughes told Healthcare IT News, “We know from previous research that use of imaging leads to reduced rates of hospital readmissions, fewer unnecessary procedures, shorter hospital stays, longer lifespans and lower mortality rates.  As we look at imaging utilization and spending, we need to understand the whole picture of imaging’s relationship to healthcare cost trends and quality of care.”

Budget hawks looking for more places to trim federal spending should consider just how wise across-the-board cuts to healthcare technology really are.  Healthcare leaders certainly want healthcare dollars wisely spent and waste eliminated.  But as the JACR report showed, arbitrary cuts to medical technology spending could amount to cutting off your nose to spite your face.