1. Impact of emerging new treatments and technologies on health care
eg. Cost and access, benefits of early detection
Impact of Advances in Medical Technology on Healthcare Expenditure
Life expectancy in Australia has grown over the last decade. Expenditure on health has risen as a percentage of
GDP. 66% of the increased cost can be attributed to emerging technologies. Technology appears to be reducing
unit costs and increasing the range and quality of services that are delivered.
OtherOECD nationshave experiencedsimilar patterns of growth with a correlation between growth in per capita
GDP and health expenditure per capita. This is fuelled by increased demand and a growing number of services
which can be provided. Demand is strong and Australians are choosing to expend more on health services.
With the strong economic growth of the last ten years, a well-educated public is demanding rapid access to
emerging technologies. The safety, cost effectiveness and efficacy of these are assured by a range of national
regulators. In addition, the Australian Government actively influences the price of many new technologies to
ensure that the public receive value for money.
The majorityof healthrelatedresearchanddevelopmentinAustraliaisfundedbythe Australian Government. The
National HealthandMedical ResearchCouncil hasalead role in setting research priorities. Investment is directed
towardsnational healthpriorityareasandgeneral clinical researchaswell as encouragingthe bestAustraliantalent
to work in Australia.
Technologyalreadyintroducedhasimprovedthe range of preventative measures available, made possible earlier
and more accurate diagnosis, moved many treatments formerly performed in hospitals out into the community,
broughtthe unitcost downand enabledhealthtreatmentswhichwere notpreviouslyavailable. Thishas come at a
cost but without it Australians would require more time in hospital and have poorer health.
InformationandCommunicationsTechnology(ICT) has potential to further improve the quality of health services
and reduce the administrative load.
Impact of Advances in Medical Technology on Healthcare Expenditure
Advancesintechnologyhave reducedthe unitcostof deliveringparticular health services but increased the range
and qualityof servicesthatcanbe delivered. Growthindemandforservices,whichispartiallydrivenbyavailability
of newandbettertechnologies,hashistoricallyoutstripped unit cost savings brought about by new technologies.
This is expected to continue. The continuing demand for new and better health services will challenge our
regulatoryregimes,national financesandourhealthworkforce but,if historical trends continue, will also result in
better health outcomes for all Australians.
For the purpose of this submission we are using the Productivity Commission’s definition of technology which
encompassesphysical equipment,instruments and pharmaceuticals, clinical procedures, knowledge and support
systems. Within these terms advances in medical technology have been the strongest drivers of growth in
healthcare expenditure over the last decade.
(Source: Department of Health and Ageing submission to the Productivity Commission)
2. Challenges in health and health care for Australia
The costs of new technology
Much of the rise in health care costs can be attributed to advances in medical technology. Diagnostic and
therapeutic advances, such as new radiological scanners, biological therapeutics, minimally invasive surgical
procedures and prostheses, frequently come at a considerable cost.
Listing these for subsidy through Medicare or the Pharmaceutical Benefits Scheme (PBS) greatly increases their
availabilityanduse,andtherefore the costtothe community.Failingtosubsidisethem inevitably raises questions
about why new medical advances are not available to all Australians, and generates political pressure.
Australia has an enviable record in the assessment of new pharmaceutical products, based on the principles of
cost-effectiveness. Criteria are used in public and private hospitals to determine access to new technology.
(Source: Medical Journal of Australia)
