Assigment 1

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Chapter02-TechnologyintheUnitedStatesHealthCareSyst2.pdf

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Technology in the

United States Health Care System

Chapter 2

Health Care Technology

“Technology is credited with the benefits of

American medicine as well as what ails it.

It is the hope for a long, productive life for

millions of people, a primary reason for the

spiraling costs of care, and the source of

many social and ethical dilemmas...”

Figure 2.1 Classification of

Healthcare Technology by Industrial Group

• Pharmaceuticals

• Medical Devices

• Medical Equipment

• Medical Processes and Procedures

• Healthcare Information Technology

Figure 2.3 Stages in

Development of Medical Technologies

1. Scientific background and development

of the idea for a product

2. Product development, approval, and

distribution

3. Diffusion, adoption, and utilization of the

product

Stage 1

• Involves a broad array of basic science

discoveries that provide a fertile

environment from which useful products

may eventually emerge.

• National Institutes of Health (NIH) plays a

critical role in this stage by providing funds

to many organizations.

Stage 2

• Product development

– Process of moving from basic research to

implementation

• Three questions are answered during this

phase

Stage 2

Is there a need and a viable market for this product?

Can an appropriate product be developed that accomplishes what the basic science research suggests it can?

Can the necessary tests and clinical trials be carried out to win the regulatory approval required for public sale and use of the product?

Stage 3

• Mixture of scientific promotion to technical

experts and general marketing to the

health care system.

• Availability of health insurance coverage

for new products is a major factor in the

eventual diffusion and use of new

technology.

Policy Issues

1. Priorities determined by government may take precedence over mandates set forth by the scientific community.

2. The best way to evaluate returns from a public investment in basic science research.

3. Private sector benefits achieved as a result of significant public investments in basic science research.

Food and Drug Administration

• FDA must approve all drugs and

pharmaceuticals, all medical devices, and

some medical equipment.

• Clinical trials conducted during Stage 2 are

central to FDA regulatory approval.

Specific Methods for

Evaluating Medical Technologies

• Review by regulatory agencies

• Technology assessments used by health

insurance carriers

Review by Regulatory Agencies

Preclinical Testing

• Sponsor must evaluate the product’s

safety and biological activity through in

vitro and in vivo animal testing.

• Sponsor must:

– Develop pharmacologic profile of product’s

effects.

– Determine its acute toxicity in at least two

animal species.

– Conduct short-term toxicity studies.

Phase I

• Typically involves less than 100 healthy

volunteers.

• Purpose

– Observe how the drug works in humans, to

determine general safety, and to see if there

are any unexpected side effects.

• Clinical effectiveness is not measured

during this phase.

Phase II

• Typically involves 250+ subjects.

• Purpose

– Obtain a first reading about the potential

effectiveness of the drug and to determine

whether it is appropriate for the trial to

progress to the next phase.

• Phase II also provides additional

information on safety and side effects.

Phase III

• Typically involves 1000+ subjects.

• Purpose

– Determine drug’s effectiveness and to see if

side effects will need to be considered.

• If the FDA is satisfied with the results, the

sponsor must submit an application to the

FDA for approval as a new drug (NDA).

Phase IV

• Sponsor must continue to monitor patient

experiences with the new drug and report

any adverse events.

• Purpose

– Pick up on any previously unexpected adverse

reactions that may only appear with longer

term or widespread use of the medication.

Drug Development Process

• Preclinical trials

– 6 years

• Clinical trials

– 7 years

• Final NDA approval

– 1-2 years

Technology

Assessment by Insurance Carriers

Request for

Technology Assessment

• Health insurance organizations will be

approached by developers and/or

clinicians.

• Insurance organization will then request a

formal assessment of the technology.

Request for

Technology Assessment

• Request for assessment focuses on

effectiveness of the technology and usually

does not include any reference to cost or

price.

Strengths of the

Technology Assessment Process

• Rigorous review of published scientific

evidence.

• No discussion of economic or financial

details.

• Carried out in an open public forum with all

background information and discussions

available to all interested parties.

Differential Impacts of

Technology on Health Care

• Economic

• Clinical

• Organizational

• Industrial

• Patients and insurance beneficiaries

• Societal and governmental policy

Economic Impact

• Technology significantly contributes to the

rise of health care costs.

• Short-term analyses may show that the

use of new technologies significantly

increase short-term expenditures.

Economic Impact

• Long-term cost effectiveness analyses

may show a much more positive impact on

health status thereby reducing total health

care costs over a lifetime.

• Cost-elevating technologies versus cost-

reducing technologies.

Clinical Impact

• Development of new technologies has

vastly improved what physicians can do for

their patients and the outcomes that can be

achieved.

• Physicians are now faced with the

increased need to follow expert clinical

standards and guidelines in practice.

Clinical Impact

• Physicians are faced with competitive

pressure to be seen by their peers and

patients as up-to-date on the latest

technologies and pharmaceuticals.

• Physicians may exert pressure on

hospitals and medical groups to acquire

the latest technologies.

Organization Impact

• Health care organizations are continuously

pressured to maintain the latest

technologies.

• Hospitals and clinics are also faced with a

growing array of regulatory, compliance,

and legal issues.

– Many of these pressures can only be met by

an increased use of newer technologies.

Industrial Impact

• Technology has given rise to new industrial

organizations and has expanded the range

of many existing companies.

• The increasing complexity and expansion

of the health care system has enabled

niche organizations to serve specialized

needs.

Industrial Impact

• IT organizations have expanded to

accommodate an increased demand for

accessible health information.

Impact on Individual

Patients and Insurance Beneficiaries

• Individuals are more directly informed

about their illnesses and the treatments

available to mitigate them.

• Insurance carriers are able to reduce

overutilization and improve the quality of

their care by educating their beneficiaries

via the Internet.

Societal and

Governmental Policy Impact

• Both the increase in the number of

uninsured individuals and the possibility of

reduced access to the latest technology

have raised significant questions regarding

social equity and fairness.

Societal and

Governmental Policy Impact

• Federal government prohibition against the

importation of drugs from countries with

lower prices versus the willingness of state

and local governments to encourage such

purchases.

Societal and Governmental

Policy Impact: FDA Issues

• Time it takes the FDA to approve

pharmaceuticals, medical devices, and

other treatments

• FDA process may not always uncover

long-term hazards to health.