This document provides an overview of medical technology and its role in healthcare. It discusses how technology has benefits like reducing complications but also increases costs. It then covers various types of medical technology like information technology, electronic health records, telemedicine, and remote monitoring. It examines factors driving innovation and diffusion of technologies as well as regulations around devices, drugs, and biologics.

2. Chapter 5
Medical Technology

3. Learning Objectives
• To understand the meaning and role of
medical technology in health care delivery
• To appreciate the growing applications of
information technology and informatics in the
delivery of health care
• To survey the factors influencing the creation,
dissemination, and utilization of technology
• To discuss the government’s role in technology
diffusion

4. Learning Objectives
• To examine the impact of technology on
various aspects of domestic and global
delivery of health care
• To study the various facets of health
technology assessment, and its current and
future directions
• To become familiar with provisions in the
Affordable Care Act that pertain to medical
technology

5. Introduction
• Technology has been a blessing
–Reduction in complications and disability
–Increased longevity
• But, technology also imposes a cost burden on
society
• The big question: Is technology worth the
cost?

6. Introduction: Changes Triggered By
Medical Technology
• Heightened consumer expectations → increased
demand and utilization
• Many specialized services have become available in
outpatient settings
• Technology has fueled specialization in medicine
• Specialization is held in higher regard than primary
care and public health
• Assessment has become crucial to evaluate the
usefulness and safety of new technology
• Complex social and ethical issues have arisen

7. What is Medical Technology?
• Application of the scientific body of knowledge
for the purpose of improving health and creating
efficiencies in the delivery of health care
• Examples:
– Organic chemistry → drugs, anesthetics
– Physics → MRI
– Computer science and communications → telemedicine
– Nanotechnology → nanomedicine

8. Main Examples of Medical Technology
See Table 5-1, p. 160

9. Information Technology (IT)
• IT deals with the gathering, storage, analysis,
and transformation of data so it becomes
useful information for health care
professionals, managers, payers, and patients

10. Examples of IT
• Medical records systems
• Radiology and laboratory reporting systems
• Pharmacy data systems
• Systems to schedule space and personnel
• Financial systems
• Materials management systems

11. IT Applications
• Clinical information systems
– Support patient care delivery
• Administrative information systems
– Support and financial and administrative systems
• Decision support systems
– Support managerial and clinical decision making

12. Health Informatics
• It uses IT but goes a step beyond by
emphasizing the improvement of health care
Example: Clinical decision support system

13. Electronic Health Records (EHRs)
EHRs enable the processing of any electronically
stored information pertaining to individual
patients for the purpose of delivering health
care services

14. Key Components of Fully-Developed EHR
Systems
(1) collection and storage of health information
on individual patients over time
(2) immediate electronic access to person and
population level information by authorized
users
(3) availability of knowledge and decision
support that enhances the quality, safety,
and efficiency of patient care
(4) support of efficient processes for health care
delivery

15. Benefits of EHR
• savings in health care costs
• reduced medical errors
• improved health

16. Interoperability
• Enables access to individual records online
from many separate automated systems
within an electronic network
• It eliminates the need for letters and faxes to
share a patient’s clinical information among
providers

17. Health Information Organization (HIO)
An independent organization that brings
together health care stakeholders within a
defined geographic area and facilitates
electronic information exchange among these
stakeholders with the objective of improving the
delivery of health care in the community

18. Adoption of EHRs
• Slow progress being made
• Barriers:
– Capital costs
– Uncertain return on investment
– Not a one-time event – needs ongoing testing and
modifications

19. Incentives for EHR Adoption
1. Health Information Technology for Economic
and Clinical Health (HITECH) Act became part
of the American Recovery and Reinvestment
Act, 2009 – also known as the stimulus
2. The stimulus provides financial incentives to
physicians and hospitals for “meaningful use”
of IT

20. Confidentiality Concerns in EHR
• Health Insurance Portability and
Accountability Act, 1996 (HIPAA)
• Legal uses of personal medical information:
– Health care delivery
– Operations
– Reimbursement
• Organizations must devise methods to
safeguard transfer and disclosure of personal
health information (PHI)

21. Expansion of HIPAA Under HITECH
• More stringent rules apply to the disclosure of
PHI:
– Vendors and subcontractors (“business
associates”) must comply with HIPAA
– Restrictions on the use of PHI for marketing
– Patient authorization for the use of PHI in research
– Use of genetic information for insurance
underwriting
• Patients have the right to receive electronic
copies of their PHI

22. Smart Card Technology
• Can be used for holding personal medical
information that can be accessed by providers
• Privacy concerns have been a major drawback
to their use

23. Use of the Internet and Mobile Devices
• Patients have become active participants in their
own health
• Online support communities
• Empowerment and change in physician-patient
dynamics
• E-health: Various types of health care delivered over
the Internet and access to one’s own HER
• M-health: Use of wireless communication devices
• E-therapy: Interactions with health professionals
over the Internet
• Virtual physician visits

24. Telemedicine
• Distant delivery of medical treatment,
including specialized services
– Examples: teleradiology, telepathology,
telesurgery

25. Telehealth
• ‘Telemedicine’ and ‘telehealth’ are often used
interchangeably
• But, technically, there is a difference:
–Telehealth encompasses educational,
research, and administrative uses, and it
can involve clinical professionals other than
physicians

26. Synchronous and Asynchronous
Telemedicine
• Synchronous: real-time interactive
videoconferencing, e.g., telesurgery
• Asynchronous: Use of store-and-forward
technology; the recipient reviews the
information later, e.g., teleradiology

27. Remote Monitoring at Home
• Cost effective
• Low manpower and resource use
• Used for monitoring vital signs, blood
pressure, blood sugar, and cardiac function
• Medical body area networks (MBANs): low
power wideband network to transmit patient data

28. Main Barriers to Telemedicine
• Lack of reimbursement
• Cost effectiveness remains unsubstantiated,
except for teleradiology

29. Innovation, Diffusion, and Utilization
• Innovation: creation of a new product, technique, or
service
• Diffusion: Spread of technology into society
• Innovation sees rapid diffusion when:
– new technology is beneficial and the benefit can
be evaluated
– technology is compatible with the adopters’
values and needs
– it is reimbursable
• Utilization: Once it is acquired, the use of technology
is almost ensured

30. Technological Imperative
• The desire to have state-of-the-art technology
available and to use it despite the cost
• Because of the technological imperative the
US has been foremost in the world in
technological innovation and use

31. Forces That Drive Innovation and
Diffusion
• Anthro-cultural beliefs and values
• Medical specialization
• Financing and payment
• Competition
• Expenditures on R&D
• Supply-side controls
• Government policy

32. Forces That Drive Innovation and
Diffusion
• Anthro-cultural beliefs and values
– Americans have higher expectations than
Canadians and Germans that technology can cure
illnesses
– More Americans than Germans believe that it is
essential for them to have the most advanced
medical tests, drugs, procedures, and equipment
– Advanced technology is equated with high quality
– The medical model is reinforced

33. Forces That Drive Innovation and
Diffusion
• Medical specialization
– Hospital-based training of physicians
– High-intensity care is equated to high-quality care

34. Forces That Drive Innovation and
Diffusion
• Financing and payment
– Fixed payments for providers in other countries
curtail the incentive to use high-tech procedures
– Insurance coverage insulates both patients and
providers from the cost of medical care (moral
hazard; provider-induced demand)
– Pressure on insurers to cover new services – most
insurer’s follow Medicare’s lead
– Reimbursement does not always promote
technology diffusion in other countries

35. Forces That Drive Innovation and
Diffusion
• Technology-driven competition among
providers
– Competition among hospitals on the basis
of technology
– Competition between general hospitals and
physician-owned specialty hospitals
• Safeguards against self-referrals—Stark
Laws
– Investment in technology is often necessary
to recruit specialists

36. Forces That Drive Innovation and
Diffusion
• Expenditures on R&D
– $136 billion spent in 2011 (5% of the total health
care expenditures) by government and private
organizations
– 57% of R&D spending was attributed to private
pharmaceutical, biotechnology, and medical
device industries

37. Forces That Drive Innovation and
Diffusion
• Supply-side controls
– Americans resist supply-side controls
– Other countries use supply-side rationing to limit
technology and control health care costs (but it
limits access, e.g., waiting lines in Canada)
• Government policy
– Approval or disapproval of drugs and devices
– Funding of biomedical research

38. Regulation of Drugs, Devices, and Biologics
• The FDA’s drug approval process includes
– safety
– effectiveness
– access (whether by prescription or over the
counter)

39. Regulation of Drugs and Devices
See Table 5-2, p. 172

40. Device Categories
• Medical Device Amendments, 1976 (to the
FD&C Act of 1938)
– Class I – only subject to controls over fraudulent
claims of effectiveness
– Class II – subject to labeling requirements,
performance standards, and post-market
surveillance
– Class III – require premarket approval

41. Safe Medical Devices Act, 1990
Health care facilities must report serious or
potentially serious device-related injuries or
illness of patients and/or employees to the
manufacturer of the device and, if death is
involved, to the FDA as well

42. Regulation of Biologics
Laws that apply to biologics:
– Public Health Service Act of 1944
– Food, Drug, and Cosmetic Act of 1938
– Biologics Price Competition and Innovation Act of
2009
– Biosimilar User Fee Act of 2012

43. The ACA and Medical Technology
• 2.3% excise tax on certain medical devices
• The Biologics Price Competition and
Innovation Act of 2009 authorizes the FDA to
regulate biosimilars (parallel to generic drugs)
• The Biosimilar User Fee Act of 2012 authorizes
the FDA to charge a user fee for the
premarketing review of biosimilars

44. Certificate of Need Laws
• Federal CON laws required state approval
before acquiring major equipment, or before
new construction or modernization
• Federal CON requirements discontinued in
1986
• Some states still maintain CON laws
• Most states retain some control over planning
and construction of new facilities

45. Controversy Over CON laws
• No effect in the adoption of certain
technologies (e.g., robotic prostatectomy)
• Not effective in reducing costs, at least for
some medical technologies
• No direct effect on reducing per capita health
care expenditures

46. Research on Technology
• Agency for Healthcare Research and Quality
– Focus on quality, cost reduction, and better access
– Technology assessments
• National Institutes of Health (NIH)—a division
of the DHHS—both conducts and supports
basic and applied biomedical research

47. Impact of Technology on Quality of
Care
• Treatments that previously did not exist
• Improved diagnosis and treatment
• Greater effectiveness
• Less invasive procedures
• Safer procedures

48. Impact of Technology on Quality of
Care
• Gene therapy
• Regenerative medicine
• Better outcomes:
– Quick recovery
– Increased life expectancy
– Decreased morbidity and disabilitymedicine
However, assessment of individual technologies is
necessary

49. Impact of Medical Technology on Quality
of Life
– Enables people with chronic conditions and
disabilities to live normal lives
– Prosthetic devices for speech, hearing, vision, and
movement
– Pain management
– Greater independence and control in the hands of
patients
– HIV/AIDS has become a chronic disease, not a
death sentence

50. Impact of Medical Technology on Health
Care Costs
– Single most important factor in medical cost
inflation
– Some technologies are cost-neutral or cost-saving
• Costs are associated with:
– Acquisition of new technology
– Training of personnel
– Housing and settings
– Utilization – has the most effect on cost inflation

51. Cost Saving Technology
– Some technologies reduce costs
• Example: Antiretroviral therapies for HIV/AIDS
– Most cost reductions are indirect
oReduced hospitalizations
oSome may reduce labor costs
oError reduction

52. Value or Worth of Technology
• Evaluated by Cutler and Colleagues
• Increases in life expectancy have rendered
reasonable value for the money spent

53. Impact of Medical Technology on Access
–Mobile equipment
–GPS technology
–Telemedicine

54. Impact of Medical Technology on
Structures and Processes of Care Delivery
– Large, state-of-the-art medical centers
– Alternative settings, such as home health and
outpatient
– Telecommunication applications in continuing
education
– Managed care, integrated delivery systems, and
accountable care organizations require robust IT
systems
– Bar-coding systems, scanning technologies, and
radio frequency identification (RFID) are finding
applications in hospitals
– Videoconferencing

55. Impact of Medical Technology on Global
Medical Practice
US innovations become available to other
countries

56. Impact of Medical Technology on Bioethics
• Medical technology presents some serious
ethical dilemmas
– Spare embryos left over from in vitro fertilization
– Gene mapping
– Genetic cloning
– Stem cell research
– Life support technologies

57. Health Technology Assessment (HTA)
• Examination and reporting of properties of medical
technology
– Safety
– Effectiveness
– Feasibility
– Indications for use
– Cost and cost-effectiveness
– Social, economic, and ethical consequences

58. Health Technology Assessment
• Its importance:
– Vast sums of money are spent on ineffective care
and on services that do not show improved health
outcomes

59. Health Technology Assessment
• How it is done:
– Clinical trials
• Used mostly to determine efficacy and safety
• A carefully designed research study
• Controlled observations
• Participation of human subjects
• Three or four phases—from small to large
number of subjects
• Rights of subjects and ethics are protected
under HIPAA (use of IRBs is required)

60. Health Technology Assessment
• What is assessed?
– Efficacy – health benefit from the use of
technology
– Safety – benefits must outweigh risks
– Cost-effectiveness – marginal benefits in relation
to marginal costs
– Cost-benefit – benefits in relation to costs when
both can be measured in monetary terms

61. Cost Effectiveness
• Marginal benefits in relation to marginal costs
• Optimum point—marginal benefits equal
marginal costs
• Beyond the optimum point, cost effectiveness
is negative
• Flat of the curve—marginal benefits are zero
– High intensity care is often wasteful, but legal
ramifications play a role in medical decisions

62. Cost Benefit
• Conceptually similar to cost effectiveness analysis
• But, both costs and benefits are measurable in
dollars
• QALY is commonly used as a measure of
benefit—one year of high quality life
• There is no standard method for the
determination of QALY
• The ACA prohibits placement of a dollar value on
QALY

63. Directions and Issues in HTA
• Mainly private sector initiatives. DVA and DoD in the
public sector. Much of the talent resides in the private
sector. Coordination between the two sectors is needed.
• Information needs to be shared with providers and
policymakers.
• Standardization of methods is needed to make results
comparable.
• Balance between efficacy and economic worth will
require a change in the American mindset
• HTA must incorporate social, ethical, and legal concerns

64. Ethical Issues
• Potential for conflict of interest when insurers,
pharmaceutical industry, and physician advocacy
groups have major roles in HTA
• HTA funding by sources that have a financial stake
in the results can inject biases in the results
• Should society pay for novel treatments that do
not affect health and longevity?
• Withholding experimental therapies from people
who could benefit
• Ethical conduct in clinical research

65. Ethical Clinical Research
(1) The research must have social or scientific value
for improving health or enhancing knowledge.
(2) The study must be scientifically valid and
methodologically rigorous.
(3) The selection of subjects in clinical trials must be
fair.
(4) The potential benefits to patients and the
knowledge gained for further scientific work
must outweigh the risks.

66. Ethical Clinical Research
(5) Independent review of the research methods
and findings must be conducted by unaffiliated
individuals.
(6) Informed, voluntary consent must be obtained
from subjects.
(7) The privacy of enrolled subjects must be
protected, they must be offered the opportunity
to withdraw, and their well-being must be
maintained throughout the trial.