For those of us preoccupied with cost control as part of the health reform effort the last few months have been a kick in the teeth. It is bad enough that the reform drive has stalled, its fate uncertain. But that effort itself saw a constant whittling away of the tough steps necessary to halt cost escalation. There was instead an increase of assurances that, to pick the most egregious example, Medicare beneficiaries would lose no benefits (President Obama), and that other possible cuts would be on the 10-year incremental bending of the curve pathway, oh so gently leading us to the promised land.

Yet there were some of us who hoped that the reform effort would include a more pointed focus on the role of medical technology as a driver of cost escalation. It had for years, after all, been identified as the main force (in the 50% range) behind annual cost increases. That emphasis was not to be, drowned out by access issues, the overall cost of reform, and arguments about (among many others things) mandates.

A recent report from the National Center for Health Statistics may help to bring technology costs back into the foreground. Although it skirts the edge of saying so directly, its analysis and data confirm my conviction that technological progress and innovation inherently nurture cost inflation.

The economic logic of constant medical progress and innovation, the historical record shows, is to push costs up, not down. How could it be otherwise with a medical enterprise that has no final end point, no boundaries to the endless struggle against illness and death, no concept of enough is enough? 

For years many argued that more and better research were the answer to the cost problem. Just cure those expensive dread diseases. It has never worked out that way. Basic research and the innovation it generates raise health care costs.

As the National Center for Health Statistic report puts it, “some technologies save money…many technologies, however, contribute to overall health care expenditures because they increase utilization….technology provides an increasing ability to monitor, prevent, diagnose, control, and cure a growing number of health conditions and to improve quality and length of life.” Note the phrases “increasing ability” and “growing number.” Research makes that inexorable trend possible.

If it is then a myth that research will eventually lower costs, is there greater credibility to the repeated assertion that it is not technology per se that is the problem but its misuse or overuse? There is much to that argument and some evidence to back it up, but the National Center report suggests that the increased use of a number of the most commonly employed technologies indicates some waste, but mixed in with considerable efficacy.

It is the successful use of those technologies, not their overuse that provides much of the cost momentum. That proposition seems particularly true with the elderly, where the net result of their use to date is a life expectancy after 65 that is one of the highest in the world. That result is in part a tribute to Medicare as our home-grown single payer program, but in part also because of its permissiveness in providing the latest (and often best) technologies for the chronically ill and those suffering from multiple pathologies – where the largest portion of American health care are incurred.

Concerning the overuse contention, the European universal access systems get better health outcomes at lower costs partially as a result of greater parsimony in the use of medical technologies. But those countries are also suffering cost inflation even if it is less virulent than ours, in the 3%-to-4% range compared with our 6%-to-7%. Every health care system, moreover, is cringing at the prospect of rapidly aging societies, more expensive technologies to keep the elderly alive, and always rising expectations of what counts as adequate care. Almost all of them are beefing up their efforts at technology assessment, including cost-effectiveness research.

Unhappily, as the report notes, “once diffused into practice, it is often difficult to reduce the use of technologies, even in situations where they have been shown to be ineffective or not superior to less complex or less expensive alternatives.”

In light of political resistance to serious cutbacks in patient benefits, in either the public or private sector, the future prospect for controlling technology costs is discouraging. Even under competitive pressure and government limitations on excessive premium increases, insurers will still have to deal with the background costs of health care, which will keep rising. And as long as Medicare faces instant public hostility to, and political fear of, benefit cuts, then no options will be left other than to jack up copayments and deductibles and to reduce reimbursements to physicians and hospitals. The latter moves will reduce the political heat, but will eventually harm beneficiaries. Only if all the actors at the same time – individual beneficiaries, physicians, and institutions – give up something, give up in fact a good deal, will real cost control be possible.

President Obama’s new health care reform proposal for the February 25 “summit” is at the other end of the spectrum on cost, barely mentioning the topic. That is not just a pity, it is pitiful.

Daniel Callahan is editor of the Health Care Cost Monitor and author most recently of Taming the Beloved Beast: How Medical Technology Costs Are Destroying Our Health Care System.