Study: Technology Will Boost Medicare Cost

WASHINGTON (AP) _ Technological innovations on the horizon will improve people's health and extend their life, yet do nothing about curbing the soaring cost of medical care for older people. In fact,

Monday, September 26th 2005, 11:17 am

By: News On 6

WASHINGTON (AP) _ Technological innovations on the horizon will improve people's health and extend their life, yet do nothing about curbing the soaring cost of medical care for older people. In fact, those advances probably will inflate the cost of Medicare, private researchers say.

Analysts at the RAND Corp., a nonprofit research group based in Santa Monica, Calif., used a detailed model of Medicare spending to project what would happen under a number of scenarios. Their study, being released on Monday, included a look at 10 medical technologies that experts said would emerge in the coming decades.

For example, researchers estimated what the cost might be of expanding the use of implantable defibrillators for life-threatening heart conditions.

The devices, which show promise in treating heart attacks and heart failure, are planted in a patient's chest. If half of the patients with new cases of heart failure or heart attacks got the devices, health care spending on the elderly would increase by $14 billion, or 4 percent, over the next 10 years, according to the study.

``This technology is valuable because it will improve health and extend lives. But we need to begin thinking about how to pay for it,'' said Dana Goldman, director of health economics at RAND Health.

Goldman and fellow researchers said older people's health has improved in important ways since the 1980s and can be expected to continue to do so. But when people live longer, they spend more to maintain their health, he said.

Researchers factored in lifesaving equipment such as defibrillators for their spending model. They even simulated how much spending would increase if scientists discovered a pill to extend life. Spending would increase simply because millions of more people would be eligible for Medicare, they noted.

``Ultimately, society faces its greatest spending risk not from demographics and health trends, but rather from medical technologies,'' the researchers concluded in the journal Health Affairs.

Health care analysts responded to the study in a collection of reports issued on the Health Affairs Web site.

David Cutler, dean for the social sciences at Harvard University, said the model does not take into account inventions that would allow doctors to do what they do now, but at a lower cost. For example, it is possible that scientists will develop a type of cardiac intervention that involves less operating time than angioplasty.

``Accounting for these factors, my forecast about medical spending is rosier than the (model) suggests,'' Cutler said.

``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,'' he said.