Medicare, the federal program that already covers healthcare expenses for 41 million elderly Americans, may not be able to sustain the costs of new technologies.

New technologies increase the cost of healthcare for two reasons: treatment costs and an increase in people whose lives are saved, and who continue to be covered by Medicare.

Medical treatment is expensive, and the current healthcare system does not encourage the development of inexpensive alternatives. As Dana Goldman, corporate chair and director of health economics at Rand Corp. explains: "When it comes to medical technology, there is no incentive to develop something that's pretty good but less expensive because the people who are buying it don't pay for it. It's not surprising that everyone wants a Cadillac instead of a Hyundai."

There is a possibility that technologies will become cheaper over time, but even this would not alter the second reason for an increase in Medicare spending: the number of people whose lives will be saved by new technologies and will continue to be eligible for Medicare benefits.

This study operates on the notion that the longer a person lives, the more money he or she will cost the federal government. For example, at age 70, a person who is obese will cost Medicare about $149,000 over the remainder of his or her life, Under this line of reasoning, new technologies that extend lives will drastically increase the cost of healthcare spending.

This financial figuring, however, is criticized because it does not take into consideration the value of the lives saved. From a financial standpoint, biomedical technology will increase the number of people who are healthy enough to work. Productive people are good for the economy, and may help to balance out the rising costs of healthcare.

© 2005 MyDNA.com