Excellent topic.

Why is the cost of medical technology increasing at such a huge rate when virtually all other types of technology decrease in cost and increase in functionality every year. Think how much mobile phones, PCs and TVs cost a few years ago, and how much they cost now. As an engineer working in high tech product development I’d like to know how a mobile phone sized device can sell for $100,000 or a mechnical joint can sell for $20,000.

One problem with the medical industry is that it is generally not an open competitive one, but instead has layers of regulation, protection and entrenched interests which foster oligopolistic behaviour. In the name of safety we taxpayers pick up the bill for an inefficient anti-competitive industry which sometimes protects profits more than lives. If the providers of medical services, drugs, and devices are not reformed in the future we will most likely face the scenario which Kevin describes. The irony will be that people may die because the systems which were put into place to protect them ultimately ended up making specialised healthcare too expensive for them.

This post will of course draw predictable outcry from boomer and pre-boomer folks, but the question must be asked, if one is hypothetically well into retirement, can $20000 or more be justified if it will just give the person maybe an extra 2~5 or so years when the money spent on a younger person with workforce, family or other attachments will see the latter a very long and fulfilling life.

Of course with an ageing pop the boomers and pre-boomers are getting more clout. From a whole of society perspective, this may not be in whole society;s best interests.

AndrewM makes a good point; Medicine is in fact the only area of human endeavour that sees the introduction of technology drive costs up - rather than down. And Australian doctors have a reputation of being some of the fastes when it comes to technological update - and often in the face of no real evidence that the technology leads to improved outcomes.

Mr Pittman also uses hip prostheses as an example; the same prosthesis purchased by a volume consumer - say a busy orthpoaedic hospital - will be purchased at a premium by a factor of 5 in some cases by a smaller consumer - those expensive prices quoted by Mr Pittman are very arbitrary and do not reflect the real material costs of the item in many cases - they might be priced at $20K but really worth about 2.

As well as the rising cost of technology you can add changing methods af practice and fee for service arrangements. Consider the simple case of various forms of key hole surgery; where a surgeon might have worked for a couple of sessions doing maybe four medium length procedures - technology in some instances permits them to double their out put - that means double the disposable items, double the linen, double the equipment, increased use of sterilzing equipment and an increase in anesthetic drugs and double the cases the anesthetist can charge for and of course double the cases the surgeon charges for- everything escalates; the theatre staff, nurses and techicians get paid for the same 8 hours, the ward staff, cleaning and reception staff get paid for the same 8 hours whether they manage a thruogh put of 8 or 18 patients.

The only thing that goes up are the cost of consumables for the hospital and the fees attracted by the doctors.

There are other issues to address within the system before we start talking about rationing.

Good point Pete, when technology provides benefits they are usually pocketed by the specialists.

In April the Economist did a special report on the use of information technology in healthcare and found it to one of the most backward of all industries. It claimed that redundancy and inefficincy accounted for up to 40% of the cost of healthcare, and most of this could be eliminated though the use of IT. The article also found that "the inability and reluntance of doctors to use IT more widely is killing thousands of people".

There seems to be little incentive for the legions of senior health administrators and specialists to make their industry safer and more efficient; we taxpayers seem destined to fund them come what may. Perhaps when Kevin's scenario comes to pass and people are denied services becasue fo cost they will start to ask how their tax money was spent and realise they have been taken for a ride.

Unfortunately this forum seems to have fizzled out, it's a pity because it is more worthy of debate than other more popular topics. Anyway, if anyone out there is interested in saving lives and preserving our level of healthcare, you might like to read the following:
http://www.sciencedaily.com/upi/index.php?feed=Science&article=UPI-1-20050715-11123100-bc-us-medicalrecords1.xml

The following is an extract.
"Conservatively, when fully implemented an electronic healthcare system of medical records and communications could save $78 billion a year -- that's a conservative estimate -- of the $1.3 trillion U.S. healthcare costs," Rep. Patrick Kennedy, D-R.I. told United Press International. "Computerized medical records would save nearly 100,000 lives a year due to preventable medical errors…About 30 cents of every healthcare dollar is spent on redundant testing, copying, coding and filing, requiring an average of four attendants for every doctor, Kennedy said. “

The number of preventable medicial deaths in Australia, the US and the rest of the world is appalling, I am mystified as to why it is so little discussed compared to other causes of death which affect far fewer people and are virtually impossible to prevent.

Stop passing the buck on Health Care. Be it Australia or the world, we need to put a "human face" back into the systems of Health.

I believe it is true no matter where we go at present.. it needs to happen... and I believe; 'communities are justified in voicing a civic need to participate - in setting standards of care for the public health system'.

I don't understand in regional and remote areas of Far North Queensland for example, why the Health System doesn't promote innovative leadership from its staff, too engage with Community, as Pittman's article suggests Jim Bacon did, as Premier in Tasmania.

It is frustrating! It is not as if the information is not out there, it is a rank and file problem within the Health System itself, to use it's (gathered) IT knowledge data collected, to make a effective arguement, for real innovative change.

I do agree with anyone who may suggest that the Health System is dragging behind other industires.

I feel presently this statistic making.. is part of the problem. The information is not used for the open benefit of the public, to enforce more evidence for making productive policy, but rather supports the servicing role of health staff, by demanding and protecting the non-flexible comformity of their own interests, be they commercial, political or otherwise.

It is true, "No matter how much we argue for reallocation of resources from other areas of Government expenditure to health, there will always be a finite amount of resources. The issue is how should those finite resources be spent?"

Boost activities in Preventive Health, add-on "inclusion" of the whole community approach! "Wellbeing", has more to do with the ways we approach health as a factor of "life-quality" than anything - anywhere that the science of Western medicine is leading us at present.

This means allowing regional and local health staff to engage and initiate Preventive Health programs that help deal with the causes of ill-health, through education and awareness that supports communities through Community Health policy guidelines, at ground levels.

Maria Altmann
http://www.miacat.com

I agree Maria. Information Technology is an important element, but the most important part is people and attitudes.

A recent Norwegian investigation into preventable hospital deaths concluded "a culture of blame for mistakes keeps those in medicine from learning from hospital errors mistakes", and I think this is one of the core problems in our health system too.

The Patel case is a classic example of something that could have been easily detected and prevented if information been more widely circulated and analysed. Likewise the Shipman case (200 to 1000 intentional murders) shows that doctors are literally getting away with murder because they are not subject to the same scruitiny that any other critical non-medical services providers would be.

Just thought I'd throw in some additions :

The price of medicine goes up, not down. While regulation and lack of an open market is partly to blame, we do need regulation in such a critical area. A larger problem is that the greatest competition is for performance rather than price (or even price/performance). And this is _perceived_ performance, not _actual_ performance. Medical providers have an interest in promoting "new" technology when its really not much better than the "old" stuff. Hence, we can be forever "ascending the cliff-face", without ever pausing to take advantage of the view.

Just what is "best" is also susceptible to change. There's also a tendency to treat more people because the capacity provides itself. Keyhole surgery could have meant we did the same number of operations at lower total cost to society, but as noted by sneekepete, it provided the possibility of doing more operations and churning more money through. Were these additional operations in some sense "the result of marketing", or operations that were always worthwhile, but are now practical because of the lower cost of operations ? I don't know.

The root of spiralling health care costs is the entitlement mentality, the belief that "society" owes me perfect health. For example, do you realize that Panadol is still on the PBS, even though it is usually cheaper to buy it at the supermarket? Why? Because there was such an outcry when the government attempted to take it of the list of subsidized drugs.

Rationing is a fact. Every dollar spent on one intervention is a dollar that could be spent on something else. The question is, where is it most cost-effective to spend our money? This is rationing, and don't be afraid of it. If we didn't carefully use our resources the economy would soon go into a spin and health care would be impossible for most people.

It is not "socially divisive and unreasonable to suppose that those with private insurance can make choices - while those dependent on the public system can’t" - it is simply reality. People with more money can afford to buy things (including health care) that others with less money can't. Accept that fact. If you can't accept that, your only logical alternative is to legislate that every person receives exactly the same income, regardless of effort, experience, skill or talent. Only then would you remove what you perceive as "social division" but what is in fact freedom for people to run their own lives.

The cost of putting economics into health care as a parameter is the cost of losing the patients!
What balderdash is spoken in defense of economic rationalism!
Bits of plastic and metal don't cost thousands of dollars to produce. Its the marketing and paying of reps for brand stuff that costs heaps, so why cant't we just get a generic consumables?
Lets face the facts -= until patients become the focus of healthcare again, all decisions based on economics are going to be flawed and in many case wrong for patients, staff and society as a whole.
Why can't we decide to help people just because they need help?
Life is a gift - we can use it well or ill, we can support it or work against it.
The issues are simple - either we seek to support life and enhance it wherever possible or give in to despair and allow people to suffer early death, denial of their life and denial of our ability to make a difference.
Implant companies make a lot of money - it is probably unnecessary expense if you look at how a person comes to be in the queue for joint replacement!
What happened 20,50 yrs ago? Did we care for people any less - Are we treating the whole person or just opting for the technological easy fix knowing it will fail in x number of years and bonus the implant company each time in a growing arc of profitability and what of the health care provider who is placed on this economic treadmill which has only one end? the answer lies in putting patient care back as our focus and exploring treatment which can aleviate suffering as being superior to treatment which seeks only to fix the problem in the short term.

YOu go get 'em matron.

Mykah has a point we ration now - but we ration in the face of poorly coordinated and over priced services.

We need a PBS not to foster learnt dependance on the gvernment but to offset rapacious pricing by pharmaceutical companies - yes I know they spend money on R and D but they also waste vast sums on promotion and advertising.

There is right now plenty of money invested in the health system but the system is managed by nincompoops.

What a waste of a by and large publicly funded education it is for a doctor to inject collagen into chicks lips, or small doses of the plague into their foreheads to make them look younger or hoist up some ones sagging bosom! Nope we dont need to ration just re allocate the resources