concerned only with the benefit to be derived from the use of technology, cost-effectiveness
evaluates the additional (marginal) benefits to be derived in relation to the additional (marginal)
costs to be incurred.
• Cost-efficiency—cost-effectiveness; benefits exceed the costs in medical care delivery.
• Cost-utility analysis—Cost-effectiveness or cost-benefit analysis in which quality-adjusted life
services.
• E-therapy—Any type of professional therapeutic interaction that makes use of the Internet to
connect qualified mental health professionals and their clients.
• Flat of the curve—A point in the health production function where the potential health benefits
from additional delivery of medical care approach zero. Traditionally, much of the medical care
• Information technology—Technology used in the transformation of data so it becomes useful
information.
• Medical technology—Practical application of the scientific body of knowledge for the purpose
of improving health and creating efficiencies in the delivery of health care.
• M-health—Short for “mobile health,” which is the use of wireless communication devices to
• Self-referrals—Referral of patients to a facility in which the physician has an ownership
interest. Self-referral is illegal.
• Smart cards—Devices similar to credit cards that have an embedded computer chip and
memory to hold personal medical information that can be accessed and updated at a hospital or
physician’s office.
• Synchronous technology—Technology in which telecommunications occur in real time.
• Technological imperative—Implies the use of technology without cost considerations,
especially when the benefits to be derived from the use of technology are small compared to the
costs.
REVIEW QUESTIONS
1. Medical technology encompasses more than just sophisticated equipment. Discuss.
Medical technology encompasses a much broader concept than just sophisticated equipment and
devices. It includes life-saving procedures, such as bone marrow and organ transplants, as well
2. What role does an IT department play in a modern health care organization?
IT departments manage the continuously increasing flow of information and ensure that it is
made available in a user-friendly format to health care professionals, managers, payers, and
3. Provide brief descriptions of clinical information systems, administrative information
systems, and decision support systems in health care delivery.
(1) Clinical information systems involve the organized processing, storage, and retrieval of
(2) Administrative information systems are designed to assist in carrying out financial and
(3) Decision support systems provide information and analytical tools to support managerial
decision making. Such tools are used to forecast patient volume, project staffing requirements,
4. Distinguish between information technology (IT) and health informatics.
IT deals with the gathering, storage, analysis, and transformation of data so it becomes useful
5. According to the Institute of Medicine, what are the four main components of a fully
developed electronic health records (EHR) system?
6. What are the main provisions of HIPAA with regard to the protection of personal health
information? What provisions were added to HIPAA under the HITECH law?
7. What is telemedicine? How do the synchronous and asynchronous forms of telemedicine
differ in their applications?
Telemedicine is the distant delivery of medical treatment. It does not involve face-to-face contact
between patients and providers. It also enables generalists to consult specialists located at a
8. Which factors have been responsible for the low diffusion and low use of telemedicine?
9. Generally speaking, why is medical technology more readily available and used in the
United States than in other countries?
10. How does technology-driven competition lead to greater levels of technology diffusion?
How does technological diffusion, in turn, lead to greater competition? How does
technology-driven competition lead to duplication of services?
Hospitals, as well as outpatient centers, compete to attract insured patients. Well-insured patients
look for quality, and institutions create perceptions of higher quality by acquiring and advertising
state-of-the-art technology. Specialists have also been responsible for stimulating competition.
11. Summarize the government’s role in technology diffusion.
The Food and Drug Administration (FDA) regulates drugs and medical devices through an
12. What does the ACA of 2010 propose regarding the development of biosimilars? What is
this proposal intended to accomplish?
The Biologics Price Competition and Innovation Act of 2009 was incorporated into the
ACA. In a nutshell, the law allows the FDA to approve “biosimilars” under a process
13. Provide a brief overview of how technology influences the quality of medical care and
quality of life.
Technology can provide new remedies where none existed before. Improvements in diagnostic
14. Discuss the relationship between technological innovation and healthcare expenditures.
Technological innovations have been the single most important factor in medical cost inflation.
15. What impact has technology had on access to medical care?
16. Discuss the roles of efficacy, safety, and cost effectiveness in the context of health
technology assessment.
Efficacy refers to effectiveness or health benefits a technology provides. Without the information
on efficacy, it is almost impossible to know a technology’s usefulness. Safety considerations are
17. Why is it important to achieve a balance between clinical efficacy and economic worth
(cost effectiveness) of medical treatments?
As health care expenditures continue to rise, it becomes important to evaluate what we are
receiving in return for the money spent. Insured Americans often want all available medical
18. What are some of the ethical issues surrounding the development and use of medical
technology?
Gene mapping of humans, genetic cloning, stem cell research, and other areas of growing
interest to scientists may hold potential benefits, but they also present serious ethical dilemmas.
Life support technology raises serious ethical issues, especially in medical decisions regarding