Does new technology increase or decrease health care costs? The treatment of peptic ulceration.

OBJECTIVES

To determine whether new technology increases or decreases formal health care costs, with reference to the diagnosis and treatment of peptic ulcers.

METHODS

A costing method has been devised which is designed to investigate directly the way in which the costs to formal health services of diagnosing and treating an individual illness have changed with changes in technology.

RESULTS

The cost of diagnosis has increased almost entirely as a result of the high cost of endoscopy compared with X-ray examination. The introduction of H2-receptor antagonist drugs increased the cost of treatment compared with the earlier phases of surgical treatment. Subsequently, Helicobacter pylori eradication treatment has reduced the cost of treatment compared with all earlier phases of technology.

CONCLUSIONS

A method has been devised that allows the impact of changes in medical technology on formal health care costs to be investigated for individual illnesses. In the treatment of peptic ulceration, the current technology, H. pylori eradication, has lower treatment costs than all previous technologies. The evidence from previous studies and this study is insufficient to support the assertion that new technology in general leads either to an increase or to a decrease in health care costs.