Technological Change in Health Care: A Global Analysis of Heart Attack

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Evidence from the United States suggests that technological change is a key factor in understanding both medical expenditure growth and recent dramatic improvements in the health of people with serious illnesses. Yet little international research has examined how the causes and consequences of technological change in health care differ worldwide. Seeking to illuminate these issues, this volume documents how use of high-technology treatments for heart attack changed in fifteen developed countries over the 1980s and 1990s. Drawn from the collaborative effort of seventeen research teams in fifteen countries, it provides a cross-country analysis of microdata that illuminates the relationships between public policies toward health care, technology, costs, and health outcomes.

The comparisons presented here confirm that the use of medical technology in treatment for heart attack is strongly related to incentives, and that technological change is an important cause of medical expenditure growth in all developed countries. Each participating research team reviewed the economic and regulatory incentives provided by their country's health system, and major changes in those incentives over the 1980s and 1990s, according to a commonly used framework. Such incentives include: the magnitude of out-of-pocket costs to patients, the generosity of reimbursement to physicians and hospitals, regulation of the use of new technologies or the supply of physicians, regulation of competition, and the structure of hospital ownership. Each team also reviewed how care for heart attacks has changed in their country over the past decade.

The book will be of enormous importance to health economists, medical researchers and epidemiologists, and policymakers.

Mark McClellan is Associate Professor of Economics and of Medicine and, by courtesy, of Health Research and Policy, Stanford University. He is a National Fellow, the Hoover Institution. Daniel P. Kessler is Associate Professor of Economics, Law, and Policy in the Graduate School of Business, Stanford University, and a Research Fellow, the Hoover Institution.

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Product Details

  • ISBN-13: 9780472111282
  • Publisher: University of Michigan Press
  • Publication date: 10/24/2002
  • Series: Studies in Health Economics & Policy
  • Pages: 432
  • Product dimensions: 6.52 (w) x 9.32 (h) x 1.30 (d)

Read an Excerpt

Technological Change in Health Care: a Global Analysis of Heart Attack

By Daniel P. Kessler

University of Michigan Press

Copyright © 2002 Daniel P. Kessler
All right reserved.

ISBN: 0472111280

CHAPTER 1 - Introduction: A Global Analysis of Technological Change in Health Care, with a Focus on Heart Attacks

Mark B. McClellan and Daniel P. Kessler

In virtually all developed countries, health care costs are rising and population health is improving. Technological change in health care, one of the most salient features of the industry, may be a major contributor in both of these worldwide facts. Yet many previous studies have shown that medical treatment differs substantially around the world. If changes in medical treatment also differ across countries, then policies that affect technological change may have important implications for both the nature and the magnitude of growth in medical expenditures and improvements in health. Because technological change in health care is rapid, these dynamic differences could have much greater long-term consequences for the health benefits and resource costs of different kinds of health care systems than differences between health care systems at a point in time. Despite its central importance, little is known about whether the incentives for changing medical practice provided by different health care systems influence technological change, or about the consequences of these differences.

This book presents the first report of a global research network that is implementing a new approach to analyzing the causes and consequences of technological change in health care. This approach involves the analysis of medical care for consistently defined, common health problems in a broad range of countries. By analyzing technological change at the micro level, we are able to integrate economic, clinical, and epidemiologic perspectives for understanding technological change. We are also able to minimize problems of noncomparability across countries and to isolate the contribution of medical care to health changes that, at a broader level, are influenced by many other factors.

We focus on care for heart attacks in this book. A heart attack is a common and serious illness in all developed countries, including Asian countries. It is a clinical condition that is defined similarly throughout the world and has been studied in a number of previous international epidemiologic studies. Because most of the key treatments for heart attack are delivered in inpatient settings, the problems of data reliability characteristic of other treatment settings are minimized. Moreover, many innovations have occurred in heart attack treatment in recent years, providing considerable opportunities for differences in technological change and their consequences to emerge.

In this chapter, we place our comparative study in the context of previous international research and introduce our methods. We begin by reviewing what is known about differences in technological change in health care across countries. We then describe the approach implemented in each chapter in the book. First, we describe how the regulatory and financial incentives for technological change differ across countries, by demonstrating how they can influence medical decisions for treating a common health problem. Second, we define our approach to measuring technological change and the consequences of technological change for patient health.

Technological Change in Health Care: Context and Previous Studies

Technological Change and Medical Expenditure Growth

Large differences in measured spending on health care across developed countries are well known. For example, per capita spending in Japan in 1995 was approximately $1,400, compared to over $3,000 in the United States. Perhaps less well recognized is the fact that medical spending, whether measured by share of GDP or real expenditures per capita, has increased enormously in recent decades. Real per capita spending in Japan has more than tripled in the past 25 years, and per capita spending in the United States has increased by more than 2.5 times. Newhouse (1993) noted that similar--and substantial--real expenditure growth rates occurred in virtually all the OECD (Organisation for Economic Cooperation and Development) countries, at least through the 1980s. In the 1990s, trends appear to have diverged (Anderson and Poullier 1999), but the reasons for this divergence are not well understood. Increasing health care expenditures are consequently a global concern.

Considerable evidence suggests that technological change in health care is responsible for much of this expenditure growth worldwide. Most of this evidence is indirect: all the other factors that might contribute to such expenditure growth seem able to explain only a small fraction of it. Population aging has been and remains an important policy concern, yet even in the most rapidly aging countries it can account for real growth rates of perhaps 1 percent per year, often much lower than medical expenditure growth rates. Per capita income has increased as a result of economic growth, but the medical spending increases are far greater than can be explained by higher income alone. There is little evidence that regulation or competition in the health care industry has changed in a way that, in a static context, could lead to substantial price increases. Many countries have implemented important policy changes, such as large expansions of the availability of insurance, that might also contribute to one-time increases in expenditures if technology and these other factors are held constant. Once again, however, reasonable estimates of the impact of these policy changes, at least in the short term, explain only a small part of the growth in most countries.

Recently, more direct evidence on the importance of technological change has emerged, though most of it is confined to the United States. These studies focus on particular illnesses, because the treatments used in different illnesses differ, and their use must be quantified explicitly if technology is not to be treated as a residual. For example, Cutler and McClellan (1998) and Cutler, McClellan, Newhouse, and Remler (1998) show that virtually all of the expenditure growth in heart attack care is associated with the use of new treatments, or with increases in the quantities of existing treatments; in general, prices for particular treatments increase only slightly or actually fall over time. Unfortunately, little comparable evidence exists for most other countries, though there is no obvious reason to think that technological change is much less important in other parts of the world.

Another fact suggesting the universal importance of technological change in explaining medical expenditure growth is that, in a fundamental sense, production in health care is global. Although patients receive the vast majority of their medical care locally, the knowledge base, drugs, devices, and procedures that comprise this care are far from local. Clinicians throughout the developed world read many of the same medical journals and attend many of the same conferences. Drug and device manufacturers either are global or sell national or regional versions of products that are largely globally available, often as part of international collaborative ventures. Differences in national systems of drug regulation and, to a lesser extent, device regulation may imply that specific products may not become available in all countries at exactly the same time. But a quick look at medical reports from particular countries and the many international collaborative clinical studies suggests that approximately equivalent versions of all commonly used products are available in all developed countries, at least within several years of each other. And because international exchanges of medical information are generally not regulated, medical procedures--which consist mainly of labor inputs of expert time, effort, and skill, and comprise the bulk of medical expenditures--generally become known quickly throughout the world. In our study, virtually all of the major treatments that were quantitatively important contributors to medical expenditures were available in all of our participating countries, generally within several years or less.

Yet despite the global nature of basic knowledge about health care production, and the global availability of important health care products, many comparative studies have shown that medical practices differ substantially across countries. Thus, although technological change in health care may be driven ultimately by discovery and invention of new techniques and devices, cross-national studies of the causes and consequences of technological change focus on differences in rates of actual use of technologies.

This research demonstrates that nonmedical factors, in particular the financial and regulatory features embodied in a country's health care system, may explain much of these variations in practices around the world at a point in time. The research highlights another notable feature of the health care industry: how differently it is regulated and financed in developed countries around the world. We do not attempt to review this vast literature here; instead, we summarize one recent study to illustrate these prior comparisons. The McKinsey Global Research Institute (1996) conducted a detailed review of differences in medical practices and their consequences in three countries with quite different health care systems: the United States, the United Kingdom, and Germany. The study assessed the treatment of lung and breast cancer, diabetes, and gallbladder disease, based on medical practices around 1990. The investigators documented substantial differences in practices, with generally higher intensity of care in the United States and Germany. For example, cancer patients in these countries received more (and more intensive) chemotherapy or radiation treatments, and gallbladder patients were much more likely to be treated with surgical procedures. They also documented higher prices for nurse and especially physician services in the United States, and to a lesser extent Germany. These findings were consistent with the overall differences in health care expenditures across countries.

Though these international comparison studies provide some evidence to support the view that differences in technology use across countries are important explanations for differences in expenditures, they do not provide much direct evidence on the core questions in this book. First, and most important, very few of these studies have a dynamic perspective: they do not examine changes over time. Thus, they provide little direct evidence on the key question of the sources of expenditure growth. If expenditure growth rates are similar across countries with very different expenditure levels, is it because technological change is identical but prices are proportionally lower in the less-expensive country? Or is it because the nature or magnitude of change in real medical practice actually differs across countries? Does the less costly country use new technologies less extensively? Or does it tend to adopt different kinds of technologies? Or does it follow medical practices in the more costly country with a lag? The potential importance of technological change in explaining the rapid expenditure growth in health care suggests that these are all crucial policy questions, and direct evidence on them is lacking. Second, with the notable exception of the McKinsey study, most of these international comparisons have only evaluated clinical practices, and have not sought to compare medical resource use or expenditures across countries. Third, many of these studies have relied in large part on reviews of the medical literature (which in turn largely reflects practices at academic centers), interviews with clinical experts, or local datasets. Because variability in practice across local geographic areas is also a global phenomenon, none of these sources may provide a very representative picture of national differences in medical practices, changes in practices, and their expenditure consequences.

Technological Change and Health Improvement

Previous studies of international differences in health have also led to some notable, and perhaps puzzling, results. Differences in gross measures of population health, such as life expectancy at age 60, show little relation to the differences in health care spending just described. Substantial behavioral, cultural, and genetic differences, as well as differences in public health, educational, and income redistribution policies, have been cited as the likely reasons that little gross correlation between spending and health exists. To avoid these problems, many studies have focused on the treatment of particular well-defined health problems, for which relatively similar patient populations in different countries can be identified. For example, the McKinsey study of health care productivity examined the extent to which the differences in medical practices described above could plausibly be expected to lead to differences in health outcomes. Through a combination of literature reviews of treatment effectiveness and actual data on patient outcomes in the study countries, as well as estimation of reasonable valuations of the outcomes, the investigators concluded that U.S. productivity was better for cancer and gallbladder disease care. However, care for diabetes in the United Kingdom was better, because the multidisciplinary teams used to treat diabetics did a better job of triaging patients with different types and severity of diabetes to the most appropriate level of care. Other studies (e.g., Tu et al. 1997) have found less evidence of differences in health outcomes despite substantially different practices across countries. Once again, however, virtually all of these studies have examined practices at a point in time, raising the possibility that the differences across countries may be due to other country-specific factors.

In contrast to these studies, we examine differences in changes in health across countries. Focusing on changes may allow many of the potentially confounding country-specific factors to be differenced out. Moreover, if technological change really does improve health, then the dynamic health costs to a country of having worse policies for technological change may quickly dwarf any cross-sectional differences. In fact, almost all developed countries have experienced notable improvements in life expectancy in recent decades. For example, life expectancy at 60 has generally increased at a rate of around one year per decade since 1975. Quality of life, as assessed through a variety of different measures, also appears to have improved substantially in most countries. Because these countries have also experienced substantial expenditure growth, it seems plausible that the two trends are closely related.

The World Health Organization's MONICA project (Multinational Monitoring of Trends and Determinants in Cardiovascular Disease) represents a major international epidemiologic effort to document and understand possible national differences in the most important contributor to the improved life expectancy: reductions in death rates from ischemic heart disease, of which heart attacks are an important component. MONICA covers population areas from a large number of developed and less developed countries. The study implemented careful and consistent methods for capturing all fatal out-of-hospital coronary disease events, as well as all hospital admissions for coronary events (including both heart attacks and acute chest pains or other symptoms short of a heart attack that also result from heart disease). This careful attention to detail in describing changes in the burden of heart disease has led to a number of important findings. First, the study confirmed the importance of a substantial decline in heart disease event rates over time in explaining the falling mortality rates from heart disease. Second, the study also documented substantial reductions in mortality among patients who reached the hospital alive. Both of these findings suggest an important role for technological change in explaining improved population health. Primary and secondary prevention of heart disease includes medications to reduce blood pressure, cholesterol levels, and the workload of the heart, and these medications have become much more widely used over the past 20 years. Public health measures such as advertising campaigns, behavioral changes such as reduced smoking, and other nonmedical factors may also be important contributors to the declines in event rates.

However, these findings also illustrate why it may be difficult to discern the impact of medical treatment and especially changes in medical treatment even in disease-specific mortality trends. The importance of medical treatment in prevention, relative to public health and other nonmedical factors, is questionable. The medications involved in prevention comprise only a small share of medical care and changes in resource use in the treatment of heart disease. In contrast, the hospital treatments for patients who reach the hospital alive are more representative of the bulk of health care resource use. But the third major finding of the MONICA project illustrates the limited importance of these treatments in contributing to the total mortality trends: the bulk of heart disease deaths are out-of-hospital deaths. Because the role of the health care system in preventing these deaths is limited, and because innovations in prehospital medical care have also been limited, it is not surprising that the level or trends in aggregate health care spending appear to have little relationship to the levels or declines in heart disease death rates documented in the MONICA study. Similarly, prevention, behavior, and public health measures may be important in explaining variations and trends in other causes of death and disability, such as cancer and stroke.

For these reasons, MONICA has primarily had an epidemiologic focus on total and out-of-hospital heart disease events, and on public health and other interventions for disease prevention, rather than on the performance of the health care system in treating hospitalized heart attack patients. Thus, our research complements many of the MONICA studies reported to date by directing attention to the subset of heart disease patients for whom innovations in medical care may have important health consequences. The research also complements the MONICA focus on public health with attention to the role of economic and regulatory incentives in contributing to health improvements. Many MONICA investigators are collaborators in our research network, and the analyses we report have benefited greatly from their incorporation of MONICA data on heart attack patients.


Excerpted from Technological Change in Health Care: a Global Analysis of Heart Attack by Daniel P. Kessler Copyright © 2002 by Daniel P. Kessler. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Ch. 1 Introduction: A Global Analysis of Technological Change in Health Care, with a Focus on Heart Attacks 1
Ch. 2 Technological Change in Heart Attack Care in the United States 21
Introduction to the Canadian Chapters 55
Ch. 3 Technological Change in Heart Attack Care in Ontario, Canada, 1981-1995 58
Ch. 4 Technological Change in Heart Attack Care in Quebec, Canada 72
Ch. 5 Determinants and Consequences of Technological Change in Health Care: Acute Myocardial Infarction in Alberta, Canada 88
Ch. 6 Health Reform and Technological Change in Manitoba: Treatment of Acute Myocardial Infarction 106
Ch. 7 The Impact of New Technology on the Treatment and Outcomes of Acute Myocardial Infarction in Australia: Incentives for Technological Change and Their Consequences for Treatment Decision-Making 121
Changes in Medical Treatments and Their Consequences for Patient Health Outcomes
Ch. 8 The Causes of Consequences of Technological Change in the Treatment of Acute Myocardial Infarction in Japan 156
Ch. 9 Technological Change in the Treatment of Acute Myocardial Infarction in Korea 184
Ch. 10 Technological Change in Heart Attack Care in Taiwan 193
Ch. 11 Technological Change in the Treatment of Acute Myocardial Infarction in Sweden 208
Ch. 12 Determinants and Consequences of Technological Change in the Care of Acute Myocardial Infarction Patients in Finland 233
Ch. 13 Determinants and Consequences of Technological Change in Health Care: Acute Myocardial Infarction in Denmark 252
Ch. 14 Technological Change in Heart Attack Care in England 268
Ch. 15 Technological Change in Heart Attack Care in France: Causes and Consequences 289
Ch. 16 Technological Change in Heart Attack Care in Belgium: Causes and Consequences 306
Ch. 17 The Determinants and Consequences of Technological Change in the Care of Acute Myocardial Infarction in Italy 323
Ch. 18 Technological Change in Treatment of Acute Myocardial Infarction in Switzerland 1986-1993 343
Ch. 19 Determinants and Consequences of Technological Change in Heart Attack Care in Israel 356
Ch. 20 Conclusion 384
Glossary 399
Contributors 405
Index 411
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