Innovation and technology create game-changers. And a true game-changer was the arrival of the CT scanning capability. Slate.com’s The Big Money has a fascinating article I Wanna CT Scan Your Hand: How the Beatles created our soaring health care costs by Thomas Goetz. (This is excerpted from the book The Decision Tree: Taking Control of Your Health in the New Era of Personalized Medicine by Thomas Goetz.
This article tells the story of the invention of the CT scanning machine, and the way that changed medicine – and the subsequent problem it created, that it did not save money, but added to costs – dramatically.
Here’s an excerpt:
In most industries, technology lowers costs by reducing the workload for an expert class. The steam engine reduced the demand for buggy-whip makers, the textile factory reduced the need for seamstresses, robot welders reduced the need for the human kind in auto plants. But here again, health care is the exception: Rather than taking experts out of the process, a CT scan ends up making more work for the expert class of radiologists. Diagnostic radiology is routinely among the highest-paid specialties in medicine, with a median salary of $361,000, according to a recent survey of specialties. And these salaries are increasing faster than they are for other M.D.s, driven by hospitals that are eager for more radiologists to perform more tests. That not only keeps prices high, it makes the prospects for lowering costs almost nonexistent.
Clayton Christensen, D.B.A., a professor at Harvard Business School and author of The Innovator’s Prescription, has cited this as one of the reasons health care is in such dire straits. “When you deploy the technology to commoditize the caregiver, to enable a lower-cost provider to do something that historically had required higher cost, then it actually takes cost out of the system,” he told the policy journal Health Affairs in 2007. But, he said, “when you bring technology to the experts to do more sophisticated things, in fact, it does bring a lot of cost into the system.” The result is a classic perversion of technology and economics.
So, the lesson is this: some technology saves money, other technology adds costs. In this case, adding costs has saved many, many lives, even if all of those scans are not necessary. Let’s put it this way – if it were the life of your loved one, would you want the money spent on their CT scan?
(Note: You can read the interview conducted by Bob Morris with Clayton Christensen, quoted above, on our blog here).