Is Technological Change In Medicine Worth It?

TLDR

Medical technology is valuable when benefits outweigh costs. The study examines technological change across five medical conditions to assess whether benefits exceed costs. The analysis shows that in heart attacks, low‑birthweight infants, depression, and cataracts, benefits far exceed costs, while in breast cancer benefits and costs are roughly equal, leading the authors to conclude that overall medical spending is justified and has important policy implications.

Abstract

Medical technology is valuable if the benefits of medical advances exceed the costs. We analyze technological change in five conditions to determine if this is so. In four of the conditions--heart attacks, low-birthweight infants, depression, and cataracts--the estimated benefit of technological change is much greater than the cost. In the fifth condition, breast cancer, costs and benefits are about of equal magnitude. We conclude that medical spending as a whole is worth the increased cost of care. This has many implications for public policy.