Is Technological CHange Worth It? Essay Start.. 1st draft

My Essay
Intro
1. The cost benefit analysis approach is a good one.

Para 1
Weaknesses include the lack of discussion on the future costs and benefits including discounting and how this affects the analysis.
Talk about the treatment substitution effect and the treatment expansion effect, *rather like the value of $1 spending and its income and substitution effects. Treatment expansion may be of benefit when the treatment is highly beneficial, but not if the treatment is marginal or the patients receieving it are of marginal needs.
Dranove talks about the importance of making the correct cost benefit analysis as even using the same raw data very different implications be found. He highlights that a series of articles published in the 1990's reporting on biennial mammograms for women between 40-49. The reported costs per life-year saved ranged from $10,000 to over $100,000, most of the studies all being based from the data of the same sample of Swedish women. this caused international concern from the US and Canada and abroad, who asked the Swedish researchers for access to their data.

Para2.
Further weakness includes the use of $100,000 as a value for a year of life, when literature is overwhelmingly favouring an amount around $50,000US.
The value of one healthy life year is more commonly discussed around the value of $50,000US, not the $100,000 benefit that Cutler and McClellan use.
In the article Taking Account of Future Technology in Cost Effectiveness Analysis, published in British medical journal September 2004, Solomon et al. states that cost effective analysis interventions having incremental ratios of $50,000 per QALY in US, or 30,000 pounds in the UK ($55,000) are usually held to be cost effective. They also made the point that cost-effectiveness analysis does not usually take account of future possible advances in treatment, but taking these future possible advances into account would greatly alter a cost benefit analysis

Para3
Choice of 5 specific diseases, what can i say about them?
Measuring the costs and benefits at the disease level, as has the studies that guided their report, as they feel health improvements in aggregate are difficult to distinguish and credit corrrectly.
With 5 chosen conditions there is sufficient data over a resonable period to anylise and use these as implications for medical system more generally. They acknowlegde disease level analysis is not exact but assume that they can better ientify the uncertainties and l;imitations of the data. They confirm they do not have sufficently large conditions to draw firm conclusions.

Para4.
Importance of mentioning the other costs involved in medical innovation, that of Research and Development, and the expensive legislative/regulation system around that. How is this relevant to the discussion?
Need to be careful here as who is the cost gone up for, the cost of the operation is used as the cost value, but what about the other costs, the R&D costs, and high profits that are protected by patents (eisenberg). Missed a major cost in meical innovation- that is R & D. Eisenberg highlights that the dual structrures of patents and drug regulation are both increasing the costs of medical drug innovation. Beyond adding to the costs of drug developments, drug regulation does much to support the profitablility of new drugs. Beyond forestalling competition and supporting profits, the patent system increasingly threatens to divert profits away from drug developing firms towards other patent claimants. So I believe the authors took a deliberately simple approach to the question is technological change worth it, so that they could set aside the glaring costs and profits in medical innovation that are now simply inherent in the system due to the complex and highly regulated structure.

Para 5
Policy implications
1.They think the focus on waste spending reduction should be balanced against the potential for inhibiting technical growth. Policy should adjust its focus.
2.Better indices for medical care: They claim that their “quality adjusted” price of medical care is actually falling over time.
3.They feel the National Health Accounts data should be extended to include the benefits of medical care as well as the costs.
i think that there is no other information about benefits in national health accounts then maybe an effectiveness index might be more appropriate. this would be a cost per QALY gained analysis.
4. Managed care and other policy reforms could be assessed using the authors same cost benefit analysis

Conclusion