Questioning The Latest, Greatest Medical Technology

Harvard economists ask why experimental technologies such as proton beam therapy is so generously reimbursed?
Harvard economists ask why experimental technologies such as proton beam therapy is so generously reimbursed?

The context for the report, by Harvard's Katherine Baicker and Amitabh Chandra is one in which: "...highly cost-effective treatments like aspirin and flu shots are underused, while angioplasty is used in both lifesaving and inappropriate cases and exorbitantly unproven procedures such as proton beam therapy are generously reimbursed by public programs."

NPR's Health Blog details their paper, called "Aspirin, Angioplasty, and Proton Beam Therapy: The Economics of Smarter Health Care Spending:"

In a paper delivered last week at a Federal Reserve Bank of Kansas City symposium in Jackson Hole, Wyo., [Baicker and Chandra] warned that ACOs may not want to rein in the use of expensive technologies that haven't been proved superior to old-fashioned approaches, since the new stuff is often a major lure for patients.

They write:

[W]e do not know how well ACOs will sidestep cost-ineffective technologies, particularly if the latest shiny innovation increases market share. The viability of ACOs will depend on the receptiveness of physicians to capitated payments — some specialists will see their incomes fall and are unlikely to take these cuts quietly. While their concerns may not resonate with patients, they might if providers claim that valuable care is being withheld. Designers of ACOs are therefore keenly interested in measuring ACO performance and patient satisfaction, but current quality measures only capture truly negligent care.

The authors also warn that even if ACOs do achieve savings by performing fewer procedures, "some of the savings from lower quantities may be offset with higher prices as ACOs exert market power" by charging more to private insurers.

This program aired on August 30, 2011. The audio for this program is not available.

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Rachel Zimmerman Reporter
Rachel Zimmerman previously reported on health and the intersection of health and business for WBUR. She is working on a memoir about rebuilding her family after her husband’s suicide. 



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