4. Weisbrod (1991)

4. Weisbrod (1991) - Cutler McClellan Technological change...

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Technological change has costs and benefits To determine net impact on welfare, need to know whether cost increases associated with medical technology are greater than benefits When we consider both benefits of health care sector and costs together, it is a more useful way of understanding the productivity of the health care sector Quality-adjusted price of medical care may be
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Different ways in which technology affects the medical system “Treatment substitution” – existing patients get new treatments (which may be more or less costly) instead of old treatments, and new treatments may lead to better health “Treatment expansion effect” – new treatments lead more people to get treatment, which is beneficial if the treatment is effective
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How do we measure net benefits of medical technology? Compare present discounted value of costs and benefits (measured in dollars) Positive net value means that technological change is worthwhile
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4. Weisbrod (1991) - Cutler McClellan Technological change...

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