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Technologies and Expenditures in Healthcare


As the development of healthcare and medical technology becomes faster, the cost of treatment also grows, demanding higher expenditures from patients who are not always able to provide payment for the services. Although technology has been helpful and has decreased the number of fatal outcomes in hospitals, it still increases the cost of treatment and makes healthcare less cost-effective.

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Relationship between Technology and Healthcare Cost

The healthcare cost has been rapidly increasing for the past decade; although there are several justifications of the increased expenditures in healthcare, medical technology development and the use of information technology (IT) in healthcare are believed to be among the reasons why healthcare spending has grown this much. Chandra and Skinner (2012) divide medical technology into three categories and explain how these categories influence the cost of patient care. “Homerun” technologies are usually cost-effective and useful almost for every member of the population. The authors provide examples, such as antibiotics, surfactants for respiratory distress of newborns, X-rays, etc. (Chandra & Skinner, 2012).

Nevertheless, some of these technologies are not always cost-effective (e.g. HIV/AIDS medication). Category II technologies are potentially cost-effective, but only to a certain set of patients. The examples provided by the authors include percutaneous coronary intervention, antidepressants, and Cesarean sections (Chandra & Skinner, 2012). Category III includes treatment that is not cost-effective and demonstrates little to no effectiveness.

The problem is that it is not always possible to determine if the innovative technology belongs to the first or the third category. The authors notice that the technologies from the second and the third categories are used in the USA more often than in European countries, which can explain the growth of healthcare costs. The United States also diffuses the new technologies from the third category that are highly expensive but do not always provide any benefits. At last, expensive pharmaceutical treatments are also widely spread, but they do not always benefit the patients. Thus, although the development of technology is a positive trend, it can lead to serious changes in healthcare costs, as many technologies are not cost-effective or may even bring zero benefits to patients.

Another study stresses that although technology has a direct influence on the cost of healthcare, this cost can be justified by the benefits patients have derived from it. It is possible that, although innovation makes healthcare spending growth, it also prolongs the life of patients and increases survival rates (Sorenson, Drummond, & Khan, 2013). Thus, it is impossible to avoid increasing healthcare costs, but it does not mean this cost is unjustified.

Critical Analysis

The information presented in the articles is helpful to any member of medical staff as it proves that innovations in medical treatment are necessary even if they influence healthcare in a way that is negative for patients. However, the authors of the second study also point out that the relation between technology and expenditures in healthcare does not always seem to be as evident as other studies claim (Sorenson et al., 2013). Moreover, other studies suggest that technologies can help reduce healthcare costs: mobile apps help patients with routine care, and they do not have to arrange meetings with their doctor (West, 2012).

Thus, other factors also play a role in increasing health care costs. It would be unreasonable to claim that only technologies have increased the expenditures, as the population’s life expectancy grows, and so does the demand for better health care. Nevertheless, it is necessary for medical staff to understand whether some of the innovations are needed and if they can be replaced by technologies from the first or the second category.

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The use of expensive pharmacy is often unjustified; that is why it is also the nurse’s responsibility to evaluate whether the most expensive medication is the one needed. I, as a nurse, need to discuss the technology and cost issue with the patients and provide different options to them. The patient should have the right to choose because they control their reserves and not the hospital.


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

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.

West, D. (2012). How mobile devices are transforming healthcare. Issues in technology innovation, 18(1), 1-11.

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