Medical Innovation Duels Cost Containment

Abstract

Prologue: However the tortuous debate over health care reform concludes this year, the pressure on providers of care to change their traditional practices will only escalate. The reason seems quite obvious: No sector of the economy can continue to consume an increasing share of society's resources without facing more intense scrutiny. Within this framework Richard Rettig discusses the inevitably sharper conflict that looms ahead between two societal goals: moderating the growth of medical expenditures and maintaining a world-class capacity to innovate in medicine. Rettig asserts that the challenge is not to deny the coming conflict but rather to determine how it can best be managed. He invokes noted health economist Victor Fuchs's imperative to “tame technology but not destroy it,” by “maintaining the rate of innovation but redirecting it toward cost-reducing, quality-enhancing technical change, or possibly slowing as well as redirecting it.” Rettig is ideally suited for illuminating this conflict. As a senior staff member of the Institute of Medicine (IOM) of the National Academy of Sciences, Rettig has directed a number of studies that have examined vexing health policy issues. Most recently Rettig directed an IOM study on the use of advisory committees by the Food and Drug Administration. Earlier Rettig directed an exhaustive, congressionally requested study of Medicare s End-Stage Renal Disease Program, published by the National Academy Press. Rettig holds a doctorate in political science from the Massachusetts Institute of Technology. Previously he held appointments at three academic institutions and at RAND. He is also author of Cancer Crusade: The Story of the National Cancer Act of 1971 (Princeton University Press, 1977). Abstract: The nation's commitment to health cost control will potentially conflict with its deeper commitment to innovation in medical technology—drugs, medical devices, diagnostic and therapeutic procedures, and administrative infrastructure. Medical technology is implicated in increasing health care costs because, on a net basis, it increases the capabilities of medicine. Conceptual, methodological, institutional, and political factors limit the ability to address the potential conflict; these limits must be confronted and addressed if we are to formulate sound policy responses.

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