Technology in Health
Technology and Health Policy: Rapid Technology Diffusion and Policy Options in Korea
Soonman Kwon, Ph.D.
Seoul National University, Korea
I. Introduction
Health care providers in Korea depend heavily on high-technology medical care, contributing to the health care cost inflation. This paper aims to examine the current status of medical technology diffusion, its causes and consequences, and policy options to rationalize the use of medical technology and contain related costs. It reviews both theoretical issues associated with medical technology in general and the policy issues of Korea along with a few OECD countries. Korea has experienced a very rapid diffusion of high-tech medical devices, brand-name original drugs and medical procedures due to the financial incentive of providers associated with the fee-for-service system, dominance of private for-profit providers of health care, and the lack of regulation on the adoption of medical technology. Since the rapid diffusion of medical technology is driven by providers rather than consumers, public policy should focus on health care providers who play a role in the patients’ utilization of medical technology and related expenditure.
II. Health Care Technology and Diffusion
Medical technology has played an increasingly important role in health care. Technological developments in drugs, physical capital or high-tech devices (MRI, CT, ESWL, etc.), and new procedures such as bypass surgery or catheterization for AMI patients have led to the rapid increase in the utilization of those services. New high-tech medical devices, brand-name drugs and medical procedures contribute to better health outcomes and improved quality of life. At the same time, heavy reliance on high-technology medical care results in the increase in the intensity of care for a given episode of illness or for a given treatment day.
Technological development is always regarded as good and beneficial to the industry and society. However,
Soonman Kwon, Ph.D.
Seoul National University, Korea
I. Introduction
Health care providers in Korea depend heavily on high-technology medical care, contributing to the health care cost inflation. This paper aims to examine the current status of medical technology diffusion, its causes and consequences, and policy options to rationalize the use of medical technology and contain related costs. It reviews both theoretical issues associated with medical technology in general and the policy issues of Korea along with a few OECD countries. Korea has experienced a very rapid diffusion of high-tech medical devices, brand-name original drugs and medical procedures due to the financial incentive of providers associated with the fee-for-service system, dominance of private for-profit providers of health care, and the lack of regulation on the adoption of medical technology. Since the rapid diffusion of medical technology is driven by providers rather than consumers, public policy should focus on health care providers who play a role in the patients’ utilization of medical technology and related expenditure.
II. Health Care Technology and Diffusion
Medical technology has played an increasingly important role in health care. Technological developments in drugs, physical capital or high-tech devices (MRI, CT, ESWL, etc.), and new procedures such as bypass surgery or catheterization for AMI patients have led to the rapid increase in the utilization of those services. New high-tech medical devices, brand-name drugs and medical procedures contribute to better health outcomes and improved quality of life. At the same time, heavy reliance on high-technology medical care results in the increase in the intensity of care for a given episode of illness or for a given treatment day.
Technological development is always regarded as good and beneficial to the industry and society. However,
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