Medical Devices Provide Benefits While Contributing Only a Small Part to National Health Expenditures

Review of article by Gerald Donahoe and Guy King, F.S.A., M.A.A.A. in May of 2009, "Estimates of Medical Device Spending in the United States"

The cost of healthcare continues to rise and a large part of that rise is often thought to be the cost of new technology and the included new medical devices.  However there is also data supporting that the costs of new technologies are less than thought and are greatly offset by the resultant benefits of increased productivity and reduced disability. 

The actual data on Medical Device Spending was reviewed in a study conducted by Gerald Donahoe and Guy King, F.S.A., M.A.A.A. in May of 2009.

The major findings of this study are:

  1. Medical Device spending in 2006 was in fact 6.2% of total national health expenditures ($131.6 billion of $2,112.7 billion).
  2. Medical Device spending has risen only 0.8% as a percentage of NHE in the 18 year period of 1989-2006 (5.4% in 1989 and 6.2% in 2006).
  3. Medical Device price changes during the same period have been a low 1.1% compared to other price indexes (CPI @ 2.9%, CPI for Medical Care @ 4.9% and CPI for Medical Services @ 5.2%).

While the total spending on Medical Devices is a large number, it is not the major cause of Total Medical Spending Growth.  With the relatively small overall cost and slow cost increases of medical devices, physicians and patients can make their treatment choices based in part on new technologies efficacy and the reduced cost of the resultant early return to productivity and reduced disability.

More information can be found in the complete study, click here

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