Medical Innovation is the Mother of Health Care Necessity

Some things are just wants. Products or services that we would like to have—sometimes really like to have—but we know we can live without. Often these desires are created by product innovation. Steve Jobs introduces a new iPod or the iPhone, and suddenly we have wants we could never have imagined.

In The Overspent American Juliet Schor describes the gradual ratcheting up of needs. Home air conditioning was once considered a necessity by very few, but now fully 70 percent of us consider it a need. Because few of the old needs go away, technological advances create more “needs” that compete for our income. Just a few years ago, computers and cell phones were unheard of, and now they are must-have items.

But sometimes a new product becomes an immediate need. The minute it is introduced we have no choice but to buy it. This is particularly true for medical treatments. Health is the trump card. In Going Broke I give the example of Lipitor, the cholesterol-lowering statin drug, that, once introduced, became an instant necessity for millions of Americans. In 2006 Lipitor’s US sales were 12.9 billion dollars, making it was the highest-selling drug in the world. If you have high cholesterol that you are unable to bring down any other way, your doctor is very likely to prescribe Lipitor or a similar drug, and most consumers will fill the prescription because they feel they must. You can’t take chances with your health.

Now the non-partisan Congressional Budget Office has produced a report, “Technological Change and the Growth of Health Care Spending” showing that approximately half of the growth in US health care costs in recent decades comes from medical innovation: new treatments made possible by technological advances. Furthermore, the report concludes: “The nation’s long-term fiscal balance will be determined primarily by future growth in health care costs” (p. 17). This is a big problem fraught with ethical issues. How do we apportion medical services and who should pay? Medical innovation is a two-edged sword. It brings the hope of longer life and better health to many, but it also hungrily consumes more and more of our personal and national budgets. Where will this trend lead us?