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Medical Technologies and Healthcare Costs


The impact of medical technologies on the costs of hospital care is usually thought to be quite significant. As explained in the Literature Review, most researchers agree that both the introduction of new technologies and their use for patient treatment often account for a steep growth of the hospital budget: “Commentators often point to new medical technology as the key driver for burgeoning expenditures” (Sorenson, Drummond, & Khan, 2013, p. 223).

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New technology

For example, in the case with new technology introduction, the increase in costs is associated with the high price of technology, as well as with additional costs, such as employee training. The main issue here is that the effectiveness of new technology does not always cover its costs (Chandra & Skinner, 2012). Some technologies are, indeed, less cost-effective than others: this category “includes treatments for which randomized trials indicate no benefit (vertebroplasty, in which cement is injected to stabilize vertebrae), as well as procedures whose effectiveness has not been evaluated (intensity-modulated radiation therapy for prostate cancer)” (Chandra & Skinner, 2012, p. 647) and is responsible for the majority of cost growth.

Day-to-day use of technology

Another issue is the day-to-day use of new technologies. As Chandra and Skinner (2012) point out, the increase in costs can also be associated with the decisions made by the doctors or caregivers to use more expensive technologies: “Moral hazard occurs because a third party, the insurance company, is paying most of the cost of the transaction between the first party (the physician or health provider) and the second party (the patient). This can lead to individuals not taking sufficient precaution against illness, or more commonly, it can cause patients and providers to consume and provide ‘too much’ health care” (p. 650-651).

The role of nurses

The role of nurses in budget planning and the decreasing of costs is, therefore, substantial in both cases. For instance, when a new technology is introduced, it is up to the chief nurse and nurse managers to decide whether there is a need to train all of the nurses or just to ensure that one or two nurses per shift are trained to operate the new technology. Another way that the nurses could help in cutting the costs is related to the casual care activities: “Nurses can help make a difference in their unit budgets by not overstaffing their unit when they are in charge, avoiding excessive use of unscheduled leave that could require overtime, and monitoring the use of supplies” (Sherman & Bishop, 2012, p. 34). Opting for using cheaper techniques of the same efficiency, as well as avoiding expensive medication that has cost-effective alternatives are also important factors for cutting down on hospital costs.


The growth of hospital costs is an important issue, mainly because it does not lead to the increase in treatment efficiency: “the U.S. survival rates didn’t grow faster than the countries with the slower-growing health care sectors” (Chandra & Skinner, 2012, p. 650). Consequently, the influence of technology on the rise in costs is evident, although some researchers argue that the correlation is not straightforward: “it should be understood as being complex, with a wide range of potential intervening factors that change and shift the dynamic of the association, depending on the particular circumstances” (Sorenson et al., 2013, p. 226). Nurses have the capacity to address the issue by using the technologies and resources effectively and therefore can contribute to solving the problem of growing costs.


Chandra, A., & Skinner, J. (2012). Technology growth and expenditure growth in health care. Journal of Economic Literature, 50(3), 645-680.

Sherman, R., & Bishop, M. (2012). The business of caring: What every nurse should know about cutting costs. American Nurse Today, 7(11): 32-34.

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Sorenson, C., Drummond, M., & Khan, B. B. (2013). Medical technology as a key driver of rising health expenditure: Disentangling the relationship. ClinicoEconomics and Outcomes Research, 5(2), 223-234.

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