Executive Summary
Understanding How Technological Change Drives Health Care Cost Growth:
Challenges Facing Health Services Research
A central research and policy question is how to design policies that foster efficiency in the
development, diffusion, and use of new medical technologies. While effective policymaking
requires information on both the benefits and costs of new technologies, in this paper, we focus
on the issues that arise in measuring the costs associated with new technologies and services.
We present a framework for analyzing the contribution of technological change to cost growth,
and use this framework to guide our discussion of data necessary to conduct analyses of
technological change. We discuss conceptual issues in understanding the contribution of
technological change to cost growth and how different types of data facilitate analyses of
technological change. We conclude with recommendations on where better or more
comprehensive data could enhance our ability to understand the continued growth in health care
costs and particularly the contribution of technological change to that growth.