Debate still rages over high cost of high technology.

Cost-cutting efforts target technology for cost-benefit study

How can the rising cost of medical technology be controlled? Should the advancement of expensive diagnostic, disease-fighting and life-saving equipment be limited at all?

Health providers and medical economists in Los Angeles, Washington, D.C., and across the country are hotly debating the question of how much health care and technology we can afford. Oregon and Britain ration health care, but pay a human price for doing so. Naturally, the public wants it both ways: the best possible care and a reduction in its price tag.

"Many Americans are concerned that the proportion of our national resources devoted to health care keeps rising," said Dr. Stuart Schweitzer, professor of health service at the UCLA School of Public Health. "It has risen from 5.3 percent of GDP (gross domestic product) in 1960 to 9.2 percent in 1980 to 12.2 percent in 1990 to 14 percent today. And there is no reason to think that the increase (pace) will abate. Technology may well be responsible for half the rise in medical costs."

Besides its capital expense, the introduction of new technology to hospitals and doctors' offices also raises costs by requiring the employment of new staff to operate the new devices. According to an article in Medical Economics for Surgeons, the rising complexity of health services helped fuel a 133-percent growth in the size of hospital nursing staffs between 1972 and 1992.

The coming revolution in biotechnology and gene therapy is expected to raise health expenses considerably, as will the arrival of high-cost developments such as the artificial heart. The Institute of Medicine estimates that by 2010 as many as 20,000 people a year will be candidates for artificial hearts costing $200,000 apiece; another 25,000 to 50,000 (depending on the age cutoff) will be eligible for $100,000 ventricular assist devices.

That's $9 billion added to our annual health bill, not including maintenance and other medical costs that might be incurred during the recipient's remaining life -- which might not exceed five years.

A Kaiser Permanente study determined that the advent of laparoscopy -- non-invasive gall bladder surgery done with equipment threaded into a tiny incision -- saved a lot of money on the cost of each conventional gall bladder surgery. But 40 percent more patients had the new technique performed, resulting in an 11 percent increase in costs.

"For about five to seven years, you can limit the increase in health spending to the rate of economic growth, hoping that will squeeze out mainly waste and abuse," said Princeton health economist Uwe Reinhardt. "But after that, the costs of technology will require you to either raise spending or ration care."

Mark Pauley, chairman of the Health Care Systems Department at the Wharton School of Economics in Philadelphia, agreed: "If you want to contain costs, you have to restrain the growth of technology; you can't have this year's technology with last year's premiums."

Karen Warren, executive vice president and chief operating officer of The City of Hope Medical Center in Los Angeles, added: "It has been our experience that technology is expensive on the front end and very cost-effective on the back end. Prognoses get better and people's lives are enhanced."

Helene DesRuisseaux, senior associate director of the UCLA Medical Center in Los Angeles, said, "Much high-tech development results in lower-cost health care, lower morbidity for patients, their quicker return to work and a resulting greater productivity. Non-invasive procedures like laparoscopy and hysteroscopy reduce a 10-day hospitalization to an overnight stay at an ambulatory facility.

"Magnetic resonance imaging is replacing many painful, expensive surgical procedures," said DesRuisseaux. "Technology should not be curbed -- although its indiscriminate use should be curtailed. There are fewer MRI centers in Canada, and they are so widely dispersed that some patients do not have access to them on a reasonable basis. Therefore, some diagnostic procedures are not done and more biopsies and other invasive procedures have to be carried out."

A few weeks ago, Dr. Barry D. Pressman, director of imaging, and Dr. John Crues, director of magnetic resonance imaging at Cedars-Sinai Medical Center in Los Angeles, began using two of the fastest and most effective MRI machines available. Installing one of the new General Electric Co. devices and upgrading the hospital's other MRI machine cost the hospital $3 million. Typical operating expenses will run another $1 million.

"These faster, new MRI machines allow greater throughput and permit us to do procedures that were impossible before, such as doing functional studies in the brain of such things as blood flow rate and areas of perfusion (how much blood is reaching a particular area of the brain)," Pressman said. "Using this new MRI, we can now tell whether a tumor has recurred or if the damage we see is due to the radiation. Up until now, the best thing we had was a head scanner, which was generally unavailable because of its extremely high cost."

Magnetic resonance imaging got some bad press recently when the federal government and some state governments cracked down on self-referral by doctors with a financial interest in diagnostic imaging centers. A just-published General Accounting Office study of Medicare cases confirmed the results of several private studies showing there was 200 to 400 percent excess use of imaging centers by referring physicians who were part-owners of the MRI centers.

"These self-referral studies have led most people to the wrong conclusion: that expensive technology is not cost effective," Crues said. "Most of the people who discuss the cost efficiency of expensive machines haven't examined the denominator: the expenses of not using the machine."

Crues pointed to a recent American Academy of Orthopedic Surgeons study (not yet published) which looked at all possible ways to treat a young patient with pain in the knee after trauma (arthroscopy, joint aspiration, waiting and watching, etc.) and found that an immediate MRI -- although expensive -- was both the best medical approach and the most cost-effective technique.

"I find it absurd that we spend billions on pet food but let people die because we feel we 'can't afford' to give them adequate health care," declared Donald E. Yett, professor of economics and director of the Human Resources Research Center at USC. "Society shouldn't make different choices for one class of people than for another class. We can improve the quality of care by cutting non-health expenses. Difficult choices need to be made, and using terms like 'can't afford' avoids these choices."

His USC colleague, William Schwartz, an economist and professor of medicine, stated, "If we don't want to deny beneficial care, we don't have to. We can say that, as a society, we can pay for all this (technology). Costs will continue to rise, and we can expect them to hit around 20 percent of GDP shortly after the year 2000."

"There is some high cost/low benefit technology out there," UCLA's Schweitzer said, "such as heroic measures for the terminally ill. Some treatments are just plain ineffective for many patients, such as prostatectomy. Moreover, I am a staunch proponent of limiting expensive neonatal intensive care when the outcome is going to be poor."

Said Dr. M. Michael Shabot, director of surgical intensive care units at Cedars-Sinai, "One way managed care systems reduce medical costs is by eliminating the financial reward for using high-tech equipment. Managed care needs to be carefully managed, so that patients aren't denied tests and procedures that are important to their care."

At Cedars, Shabot has led the way in developing cutting-edge computerized systems for critical patient care. He is testing the Hewlett-Packard CareVue 9000 system, which costs $20,000 per patient bed, before Hewlett-Packard puts the system into general release.

This new technology, which brings together all the information needed to care for the patient, including data from bedside monitors and the results of lab tests, replaces the widespread system whereby information is written on paper and carried around the hospital. A downturn in a patient's condition or a bad lab result will trigger an immediate alert on the monitor.

The new system helps Cedars staff members to "triage" the hospital's intensive care unit patients every day. Triage is the procedure used to categorize patients according to the severity of their conditions. By increasing the efficiency of triage, through use of the new system, hospitals are expected to be able to better utilize their high-cost ICU beds.

That would free up ICU beds for those critically in need of intensive care, and would reduce costs by enabling hospitals to more quickly identify non-critical patients who can be moved to lower-cost beds.

Shabot explained: "If the evaluation and triage aren't done every day, ICU beds are likely to be over-utilized, and that's not good for the patient."

The most commonly mentioned way to limit the cost of technology is rationing, which is currently being implemented for state-funded health care in Oregon. Health care is already rationed in this country -- by income.

Pressman said he finds rationing abhorrent: "How can you ration care without it resulting in major societal and class warfare? A study released last week shows that we spend $40 billion on the medical care of uninsured people. Britain rations by having waiting periods for bypass surgery and other expensive procedures, so a lot of people die waiting for treatment."

Rationing can be risky. Woodland Hills-based Health Net, the second-largest managed care provider in California, was successfully sued for $89 million because it denied a patient a controversial bone marrow transplant for metastatic breast cancer. The HMO subsequently settled the matter for an amount "substantially less" than the $89 million award, but declined to specify that amount.

Duke University Professor David Eddy, a member of the Clinton health care reform task force, said, "Managed competition could promote further efficiencies (in the use of technology), but it could limit cost increases only if it included a premium cap."

Schweitzer considers premium caps a flawed idea that would freeze the allocation of resources to health care providers and would ration necessary services.

"I don't see a logical basis for politicians and academics saying we are spending too much," he said. "Expenditure should be expected to rise if we are getting higher-quality health care -- and we are.

"Some money is wasted (on) administration," Schweitzer said. "Private insurers spend 10 to 25 percent of their health care costs on administration. European countries, Canada and Medicare spend only 2 percent, so federalizing health care would lower those costs."

The increasing use of clinical pathways -- a standardized series of written diagnoses and treatment events -- can reduce health care costs by encouraging the use of procedures that have been found most medically effective and by discouraging the use of others.

In 20 U.S. hospitals, a new Hewlett-Packard electronic medical records system is reducing costs by eliminating the need for duplicative tests.

"There is something on the horizon that could eliminate a lot of unnecessary testing," said Deborah DiSanzo, general manager of Hewlett-Packard Health Care Information Systems in Andover, Mass. "Outcomes research is seeking to create software that will allow you to go to a data base and see what worked best with similar patients."

Perhaps the answer is not whether to use all the latest technology, but how to use it best.

"We need to use expensive resources in the most efficacious way," said Shabot. "Our computerized ICU system monitors our outcomes, length of stay, survival from ICU, return to ICU and continuous quality improvement. You can't just cut; you have to measure.

"In the U.S., most care givers are very uncomfortable with the concept of rationing," he said. "We believe that tremendous savings can and will occur by using expensive resources wisely and by changes in the care system that will eliminate the rewards for overusing technology."