Health Care Cost Containment and Medical Technology: A Critique of Waste Theory
![handle is hein.journals/cwrlrv36 and id is 788 raw text is: HEALTH CARE COST
CONTAINMENT AND
MEDICAL TECHNOLOGY:
A CRITIQUE OF WASTE
THEORY
Maxwell J. Mehlman*
The high cost of health care has led to proposals to reduce
wasteful medical technology under Medicare and other payment
systems. Professor Mehlman warns that achieving this objective,
while laudable in theory, is problematic because of the difficulties
of defining, detecting and eliminating technology waste.
A particular danger is that, in an effort to reduce waste, pa-
tients will be denied not only technologies that are wasteful from
the patient's own perspective but technologies that yield net patient
benefit. This risk is exacerbated by the Medicare prospective pay-
ment system, which rewards hospitals financially in inverse propor-
tion to the amount of care they furnish patients. Professor
Mehiman describes legal methods to reduce this risk, and recom-
mends significant changes in the Medicare administrative process.
INTRODUCTION
THE NEED TO control health care costs in the United State has
been widely recognized.' Much of the blame for rising costs has
been focused on health care technologies-in particular, expensive,
* Assistant Professor of Law and Director, The Law-Medicine Center, Case Western
Reserve University School of Law. B.A., Reed College (1970); Oxford University (1972);
J.D., Yale Law School (1975). This work has been supported by a grant from the Health
Systems Management Center, Weatherhead School of Management, Case Western Reserve
University, with funding provided by the W. M. Keck Foundation. The author is indebted to
his research assistants, Michael Renne and Arthur Brown, to Janet Sawyer for her help in
preparing the manuscript, and to the following for their comments: James Blumstein, Alex-
ander Capron, Ronald Coffey, Barbara DeCaesare, Ernest Gellhorn, Timothy Jost, Theodore
Marmor, E. Haavi Morreim, Duncan Neuhauser, Seymour Perry, Gordon Schatz, and Ran-
dall Shorr.
1. Expenditures for health care in the United States rose from $35.9 billion in 1965
(comprising 3.9% of the gross national product) to $355.4 billion in 1983 (10.8% GNP).
Prospective Payment Assessment Commission, Report and Recommendations to the Secre-
tary, U.S. Department of Health and Human Services, 50 Fed. Reg. 24,446, 24,457-58 (1985)
[hereinafter cited as PROPAC 1985]. For a history of government efforts to control health](ViewImageLocal?handle=hein.journals/cwrlrv36&div=34&collection=&method=preview&ext=.png&size=3)
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Health Care Cost Containment and Medical Technology: A Critique of Waste Theory
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