December, 2011    SMM-084

The Causes of Healthcare Inflation

To understand the belief that medical technology costs drive healthcare inflation it is useful to trace its origins. The idea that spending on medical technology is a primary driver of healthcare costs is often traced to the work of US health economist
Joseph Newhouse. In this, the fourth of a series of research briefs for the European Health Technology Institute (EHTI), Professor Brian D Smith looks at Newhouse’s work and discusses truth versus myth.