Healthy Savings

Healthy Savings: Medical Technology and the Economic Burden of Disease

Jul 17, 2014

Anusuya Chatterjee, Jaque King, Sindhu Kubendran, Ross DeVol

Publisher: Milken Institute

As America ages and sedentary lifestyles and unhealthy diets become more common, experts agree the nation is suffering a sharp rise in the prevalence of chronic disease. As the 21st century unfolds, technology – in the form of advanced diagnostic and therapeutic devices -- can meet the need for early detection and more effective management of illness. Some researchers, however, have questioned whether the overall benefit of technical advances outweighs the costs -- a question this report definitively answers.

Accordingly, researchers at the Milken Institute undertook a comprehensive, quantitative documentation of medical technology's impact on the economic burden of disease. The study also projects how future innovation in this sector would affect the health care system and the larger economy -- a positive benefit of more than $23 billion a year for the United States.

The study takes a systematic approach to documenting the full costs and broader economic benefits of health care investments by examining innovations pertaining to four prevalent causes of disability and death: heart disease, diabetes, colorectal cancer, and musculoskeletal disease. The report considers therapeutics and diagnostic devices that are widely used and have substantially affected the lives of patients as well as the overall U.S. economy. Among the 10 devices or device-based procedures studied are pacemakers, insulin infusion pumps, colonoscopies, and joint replacement surgery.

The data demonstrate that the use of medical technology brings considerable economic benefits. These are seen in both aggregate savings in treatment expenditures and prevention as well as the reduction of "indirect impact" through larger contributions to the economy.