Technology in ambulatory medical care: Cost increasing or cost saving?

Health insurers fear that increased use of medical technology in ambulatory care results in increased billings per physician. This view may overlook certain subtle links between available, appropriated technology in ambulatory practice and the propensity to hospitalize a marginal patient. In this paper, the impacts of technology on four components of total per physician treatment cost were analyzed statistically using 1976-1978 percentage changes for a sample of more than 700 Swiss physicians: number of cases treated, per case billings for ambulatory care, rate of hospitalization and cost of a hospital stay relative to ambulatory care. On net, a 10% reduction in use of laboratory work and X-ray procedures was estimated to result in about 2 and 0.4% savings, respectively. A similar reduction of direct drug sales to patients would increase total cost by 0.3%. From the vantage point of society, even the modest savings indicated probably disappear as soon as the full social cost of a hospital stay is taken into account.