A Question of Economics
A Question of Economics –Healthcare economics is an interesting science. Healthcare economists start by placing a value, even dollar values, on things that the lay person would consider beyond value, like a year of your life or the ability to feed yourself. In my opinion, healthcare economists make a number of large assumptions to reach their conclusions, but they do provide analytical rigor to healthcare debates that often lack objectivity.
A case in point is the value of new technology. The American healthcare system takes great pride in offering the latest and most technologically advanced care. But is new technology worth the cost? Is it saving lives (probably) or just increasing the cost of care for everyone (probably).
Earlier this month, Siemens announced that it was releasing a new kind of CT scanner, the Somatom Definition (hereafter “SD”). Instead of adding slices to the new model, as we are all used to, Siemens has added a second x-ray tube. Siemens claims that this will increase the speed of imaging, thus increasing the speed of diagnosis, reduce the patient’s radiation exposure, and increase the quality of images of moving parts, like the heart. This added capability also comes with a $3 million price tag.
So is the SD really worth it? Should hospitals mothball their $2 million 64 slice scanners for a new SD scanner? A health economist might begin to answer that question by evaluating the claims of the SD. If the SD produces higher-quality images and diagnoses are more accurate as a result and treatments are thus more effective, then there is incremental value to the patient. That value is multiplied, essentially, by the number of patients that will use that scanner in its lifetime to create the total value of the SD. That total value may or may not be greater than the $1 million dollar premium over the 64 slice.
This may seem like an esoteric way of looking at things. Indeed, we are accustomed to and typically accept arguments like, “If it saves one life, then it is worth it.” But the fact is that we have a healthcare system that must be designed for more than the individual patient and when it comes to adding cost and capability to the system, the economics matter.