The relationship between technology availability and health care spending

Abstract

We analyze the relationship between the supply of new technologies and health care utilization and spending, focusing on diagnostic imaging, cardiac, cancer, and newborn care technologies. As anticipated by previous research, increases in the supply of technology tend to be related to higher utilization and spending on the service in question. In some cases, notably diagnostic imaging, increases in availability appear associated with incremental utilization rather than substitution for other services. Policy efforts to assess and manage the availability of new technologies could benefit society where the additional spending produced by new services is not associated with strong quality improvements.