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The Impact Of Technological Intensity Of Service Provision On Physician Expenditures: An Exploratory Investigation

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  • Mehrdad Roham
  • Anait R. Gabrielyan
  • Norman P. Archer
  • Michel L. Grignon
  • Byron G. Spencer

Abstract

Advances in technology and subsequent changes in clinical practice can lead to increases in healthcare costs. Our objective is to assess the impact that changes in the technological intensity of physician‐provided health services have had on the age pattern of both the volume of services provided and the average expenditures associated with them. We based our analysis on age‐sex‐specific patient‐level administrative records of diagnoses and treatments. These records include virtually all physician services provided in the province of Ontario, Canada in a 10‐year span ending in 2004 and their associated costs. An algorithm is developed to classify services and their costs into three levels of technological intensity. We find that while the overall age‐standardized level and cost of services per capita have decreased, the volume and cost of high technologically intensive treatments have increased, especially among older patients. Copyright © 2013 John Wiley & Sons, Ltd.

Suggested Citation

  • Mehrdad Roham & Anait R. Gabrielyan & Norman P. Archer & Michel L. Grignon & Byron G. Spencer, 2014. "The Impact Of Technological Intensity Of Service Provision On Physician Expenditures: An Exploratory Investigation," Health Economics, John Wiley & Sons, Ltd., vol. 23(10), pages 1224-1241, October.
    • Handle: RePEc:wly:hlthec:v:23:y:2014:i:10:p:1224-1241
    DOI: 10.1002/hec.2979
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    1. Kuhn, Michael & Frankovic, Ivan & Wrzaczek, Stefan, 2017. "Medical Progress, Demand for Health Care, and Economic Performance," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168249, Verein für Socialpolitik / German Economic Association.
    2. Bloom, David E. & Kuhn, Michael & Prettner, Klaus, 2018. "Health and Economic Growth," IZA Discussion Papers 11939, Institute of Labor Economics (IZA).
    3. Frankovic, Ivan & Kuhn, Michael & Wrzaczek, Stefan, 2020. "Medical innovation and its diffusion: Implications for economic performance and welfare," Journal of Macroeconomics, Elsevier, vol. 66(C).
    4. Kuhn, Michael & Minniti, Antonio & Prettner, Klaus & Venturini, Francesco, 2023. "Medical innovation, life expectancy, and economic growth," Department of Economics Working Paper Series 342, WU Vienna University of Economics and Business.
    5. Ivan Frankovic & Michael Kuhn & Stefan Wrzaczek, 2020. "On the Anatomy of Medical Progress Within an Overlapping Generations Economy," De Economist, Springer, vol. 168(2), pages 215-257, June.
    6. Frankovic, Ivan & Kuhn, Michael, 2023. "Health insurance, endogenous medical progress, health expenditure growth, and welfare," Journal of Health Economics, Elsevier, vol. 87(C).

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