Newspaper article THE JOURNAL RECORD

Challenge to Technologists: Cost-Effective Breakthrough

Newspaper article THE JOURNAL RECORD

Challenge to Technologists: Cost-Effective Breakthrough

Article excerpt

Are you a surgeon, medical research scientist or an engineer?

An axiom of technological breakthroughs used to be that technology would deliver the same product or service at a fraction of the old cost. An example of this was the iron lung, used to ventilate the victims of polio in the 1950s. An inexpensive vaccine changed all that and eliminated an expensive and bulky solution to a major health problem.

This axiom does not seem to be working very well today. While miraculous solutions to health problems are almost commonplace today, the cost of these solutions is also almost prohibitively expensive. An example of this is hip replacement surgery. The old way to handle a diseased hip joint was to prescribe aspirin and a walker. Today a $25,000 hip replacement is the a likely answer. What is wrong?

One part of the answer may lie in who pays for the technology. Think of the situation this way: if you were a food services manager who came up with a technological breakthrough and put it into practice on your food service line, you would expect that each customer coming along the line would be responsible for paying for the food delivered by way of the new technology. You probably wouldn't see the customer turn to a stranger behind him and ask the stranger to pay for this food.

With third party payers such as insurance companies footing the medical bills today, the actual recipient of medical technology is insulated from the actual cost of the technology. The cost of medical technology is shifted from those who cannot afford to pay to those who can. We see more medical technology employed today than there would be without the transfer of wealth.

What is the lesson for the business person, research scientist or entrepreneur? While profits can be squeezed in the short run from shifting the wealth and payments from those who can't pay to those who can, it is a losing proposition in the long run. The cost of technology is as important an ingredient to long-run prosperity as the end result of what is accomplished.

This holds true regardless of whether the technology is a medical application, some new way of manufacturing or has to do with any other human endeavor. …

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