Compared to the older medical technologies and therapies they replace, many medical advances can help boost productivity and cost savings. However, their cumulative impact tends to increase overall costs, for several reasons:

1. Cost of increased utilization. This is the biggest factor. Medical advances can help us treat conditions that were previously untreatable, or expand the numbers of people who can benefit. And generally, if the healthcare system can, it will. So, utilization goes up. In addition, manufacturers of new drugs and medical devices are now marketing their products heavily—and directly—to consumers, which increases demand. Even if scientific and technological advances help drive healthcare prices down, overall costs will increase if people use more.

2. Cost of research and development. It is expensive to develop and bring to market some kinds of new products (e.g., pharmaceuticals, medical devices, diagnostic technology). New products typically cost more compared to the prices of previous products. The same goes for high-priced single-use items like cardiac stents and disposable laparoscopic surgical equipment, which appeal to physicians and patients but add to the cost of care.

3. Cost of replacing older technology. New technologies tend to shorten the useful life of their predecessor products. When there's rapid turnaround, there is an inflationary effect.

4. Lack of cost/benefit analysis. Our society has, as yet, been unwilling to weigh the potential benefit of a new technology against its cost.

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