Health Care Technology Part I. Information Technology, Medical Devices and Venture Capital

In this issue:  Technology Part I. Health Care Technology, Costs,  Treatment Implications;  Disruptive technologies, and Cost benefit;  Other new stories:  Cancer Care Centers limiting Medicare Patients; Medicaid expansion alternatives; Medicare Buy-in; Hot Charts on Comparative Health Care Costs;  Promise of Maryland’s hospital rate control; Fraud of the Week:  #20 million; Life Expectancy: Chart that’s not good news for women; NAIC shows how to control cost of insurance premiums with new insurance plans and Marketing Challenges ahead for new Health Exchange Products.


One of the reasons our health care costs so much it has been said is because of the costs of health care technology and medical devices. Our earlier story from  about the new proton cancer facility at the Fred Hutchinson Cancer Research Center raised my eyebrows. It is a $152 million dollar facility sponsored by ProCare an LLC. The facility is part of the Seattle Cancer Care Alliance, the Fred Hutchinson Center and Children’s Hospital.  Here is the article and the questions it raises that prompted this technology series.

Let’s Follow the Money

Health Care Technology is a big business.  Health care IT venture capital funding more than doubled in 2012, with close to $1.2 billion raised compared with $480 million in 2011, according to a Mercom report.

Follow the money:

Medical Device Companies, not doing quite as well

According to the report from PricewaterhouseCoopers and the National Venture Capital Association, the industry pulled in $2.4 billion on 313 deals, and, in a development alarming for startups, much of the decline was due to a lack of first-time financings, which were the fewest they’ve been since 1995.

That said, the medical device world closed the year impressively. In the fourth quarter, the industry tracked a 32% increase in dollar value and 9% jump in volume over Q3, according to the report

But on the other hand, see how many firms are involved. Check out these numbers:

Unlike in other countries, sellers of health-care services in America have considerable power to set prices, and so they set them quite high. Two of the five most profitable industries in the United States — the pharmaceuticals industry and the medical device industry — sell health care. With margins of almost 20 percent, they beat out even the financial sector for sheer profitability.

There is an intriguing term, however, that merits some consideration:  Disruptive technologies.

Think of the economic consequences to medical labs and hospitals across the country with these new devices:

Questioning the Costs and Benefits: Why One Hospital Said No

Or. like the cancer proton facility in Seattle referenced, some institutions question the effectiveness of more expensive new technologies that may or may not offer demonstrated improvements.

How are these new technologies evaluated and who decides on what comes on the market?  Stay tuned to the next O’ConnorReport. 

Stories of the week from around the web: 

Cancer Care Centers turning away Medicare Patients because of costs:

Medicaid Expansion:

Medicare Buy-In? :

Graphs of Comparative Health Care Costs:

What Maryland Hospital Cost Controls Promise:

Dementia Costs Growing:

Fraud of the Week:  A patient recruiter for a Miami health care company was sentenced  to serve 36 months in prison for his participation in a $20 million home health Medicare fraud scheme.

Not good news for women. Where do you live?:

National Association of Insurance Commissioners issues report on ways to control insurance premiums:

What the Marketing Challenges  Will Be:

Kathleen O’Connor (c) April 8, 2013

About Kathleen

Kathleen O’Connor: 30+ year health care consumer advocate, non-profit executive and author. For more information about Kathleen, please see "About" on the main content bar above.
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