The Dynamics of Technological Change in Medicine

Abstract

Prologue: Within public policy circles, high-technology medical care has been viewed as a curse and a blessing because of its capacity to consume an ever-increasing share of resources and the wonders it works in the diagnosis and treatment of disease. Although opinions abound about its value, far less is understood about the processes of innovation and the multiple forces that encourage or impede technologic development. In this paper Annetine Gelijns and Nathan Rosenberg discuss these processes, underscoring the diverse influences to which they are subjected. Gelijns is an assistant professor in the Department of Surgery and School of Public Health at Columbia University. She is associate director of the Center for Health Outcomes and Innovation Research in Surgery there. Gelijns holds a doctorate in medicine and science policy from the University of Amsterdam and a master of law degree from the University of Ley den, the Netherlands. Rosenberg is a professor of economics at Stanford University. He has devoted much of his career to the study of innovation in different industrial sectors and is considered to be a preeminent authority on the economics of technological change. Gelijns and Rosenberg describe innovation as a dynamic process that is greatly influenced by a close interaction between developers and users, by changes in financing and delivery modes, and by shifting patterns of medical specialization. The processes of innovation involve a wide range of actors and interests, which operate under different incentives and time lines. This paper argues that it is not possible to establish the causal connections between technological change and rising medical costs without first understanding the dynamics of innovation. Abstract: This paper contrasts a dynamic and interactive view of technological change with the linear model of medical innovation that is still so deeply ingrained in many policy discussions. In particular, it focuses on the role of feedback mechanisms between the users and the developers of medical technology and the demand and supply forces (including competition among medical specialties) determining this feedback. It explores three distinct mechanisms by which technological change may contribute to rising health care spending: intensity of use of existing technology, introduction of new technologies, and expanded application of these new technologies.