Stanford health economist Victor Fuchs, PhD, offers his perspective on how
to think about future health-care spending in an article published yesterday in the New England Journal of Medicine. He argues that technological advances in medicine deserve special attention because they’re the primary source of both health improvements and increasing expenditures. Fuchs writes:
On the one hand, it is fiscally irresponsible to continue to accept innovations regardless of cost, even if they pass tests of safety and efficacy - and it is particularly irresponsible when the interventions are provided at public expense. On the other hand, we must avoid an innovation policy that cuts off new interventions prematurely. Some interventions that are not cost-effective at first may prove to be so over time and with greater experience in implementing them. It is in gathering this experience that the private part of the “should” question becomes important. Given a substantial market for untried, cutting-edge interventions that are not subsidized by the public purse, some innovations may prove to be cost-effective in the long run. Such innovations should then be included in [a] publicly financed benefit package.