ABSTRACT

In most societies, market forces are the principal factor influencing the development and adoption of technologies. But in health care, they are at best an imperfect mechanism for ensuring that the development and introduction of new technologies will be socially and environmentally acceptable. Federal policies and programs such as tax structure, monetary policy, regulation, patent policy and aspects of national health policy also have an important impact on biomedical innovation. While these broad policies may nurture the scientific and medical professions and the economy in general, they seem to fail to provide sufficient conditions for the realization of the potential for prevention innovations. Certain medical technologies, such as organ transplants, increase expenditures because on a per unit basis, they require large quantities of health care resources. On the other hand, the increased use of certain other technologies, could have a significant beneficial impact on the unnecessary use of health services.