Impact of Technology on Healthcare Budgets

Posted: January 31, 2017

Technology has greatly affected different sectors of the economy as well as healthcare organizations.  It is evident that technology has improved health care services but at the same time, it has greatly influenced the budgets applicable to the health sector.  The article by Sorenson, Drummond, & Khan (2013) acknowledges that factors such as public demand and expectations, inefficiencies in healthcare organizations as well as an aging population affect the budgets of healthcare organizations.  The authors present their research by relying on 86 previous studies that provide them with 52% quantitative, 40% cost-effective and 24% multivariate data sets for analysis.  It is from these data sets that the following results are discussed.

Firstly, technological advances are imperative in healthcare and the way they influence the budget varies thus they increase or decrease the costs incurred.  This arises because both technology and healthcare are not static in nature.  As such, regardless of the lack of adequate research that measures the association between technology and healthcare costs, such costs should be met as a means of ensuring quality patient care.  As a result, it is imperative to understand that these costs vary due to the intertwining of factors across technologies, circumstances, and the organization, economic and social considerations surrounding the technology.

Intertwining factors that surround technology are determined by the existence of the technology.  This existence occurs where the new technology substitutes or expands the capacity of older technology, broadens disease definition and or extends life expectancy.  Each of these factors will increase or decrease costs on the basis from which the technology is applied since they dictate the level of use.  Further, the circumstance within which the technology is used defines the variance of costs.  The authors use drug-eluting tests and standard balloon angioplasty to show how this variance occurs due to either medium or high-risk use in treating patients.

Finally, the organization, economic and social factors affect how technology and costs intertwine.  These three factors are embedded in how the technology will be administered and delivered.  Where the technology requires more personnel and materials, the cost of the technology will increase or decrease and vice versa.  In addition, these factors will affect cost in relation to patient care as concerns the time and lengths of treatment.

The second article by Bodenheimer (2005) offers a different insight into how technology affects cost.  According to the author, technology will always increase costs in healthcare as well increase quality.  This perspective is based on the premises discussed below.

The first premise highlights that technological advances lead to growth in quantity of services delivered.  However, this increase in quality growth is not in tandem with unit per price of services offered.  He uses laproscopic and open cholecystectomy to highlight that in as much as the first method had a 25% cost reduction than that of the latter, service use by both has increased by 60%.  This reflects an increase in health care costs.

The second premise is that due to the availability of technology, an increase in per capita usage will be noted since the service will require for higher spending.  The author links the introduction of new technologies that patients require to higher costs.  These increased costs are due to factors such as fee-per-service, capital costs to buy the equipment and the increased payroll needed to sustain specialists who will train staff on how to use the technology.  Further, healthcare organizations may be required to expand or build new facilities to house the new technologies.  All these factors will lead to an increment in cost when applying new technologies.

The last premise looks at whether the costs are justifiable and if the spread of new technology needs to be limited.  Firstly, the author only offers two schools of thoughts as concerns justifying technology based costs.  One school of thought holds that these costs are not justifiable since they represent medical advances that will lead to overuse of the technology thus increased costs.  On the other hand, there are those who believe that where new technology is used, the results will indicate that the technological costs will be superseded by results over time.  As concerns limiting technology advances, the author shows that the benefits of technology should be weighed against potential harm and how existing technologies are improved.  Furthermore, conducting a cost-benefit analysis of the new versus the old technology. 

As discussed by Community Eye Health (2002), quality patient care should be guided by improving access, waiting times, information, admission, communication, personnel, equipment and medications by the health care system.  Nurses represent the personnel factor and they need to be able to embrace technology as a tool that will ensure they carry out their duties effectively.  As Huston (2013) shows, the role of nurses will be expanded over time and it is essential for them to master tools and information systems for them to be able to carry out their duties.  Nurses need to be at the forefront and lead others in planning, accepting and implementing technological changes.  After all, it is the role of the nurse to offer holistic patient care and where technology offers more effective avenues than what is currently employed in providing patient care, nurses should take the leadership role. 

Ultimate discount!

Check the discount here

Order now