SOC. Scl. .Lted. Vol. 25. So. I. pp. 73-81, 1987 Printed in Great Bntain. All nghts reserved zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA 0277-9536.57 53.00 +O.OO Copyright c 1957 Pergamon Journals Ltd CAPITAL INTENSIVE HOSPITAL TECHNOLOGY AND ILLNESS: AN ANALYSIS OF AMERICAN STATE DATA JOHN OST'.? and MURRAY A. STRXS’ ‘State and Regional Indicators Archive, University of Ken Hampshire, Durham, NH 03824 and ‘Implementation Technologies, Inc., P.O. Box 1381, Nashua. SH 03061, U.S.A. Abstract-This paper: (1) describes the development of a ‘hospital technology index’ to measure the level of capital intensive medical technology in each of the 50 U.S. states and the District of Columbia, (2) reports differences between states in scores on this index, and (3) tests the hypothesis that there is a low but significant negative correlation between the level of capital intensive medical technology and the level of illness. The three subscales of the hospital technology index have high alpha coefficients of reliability. are reasonably orthogonal, and there is at least some evidence of construct and discriminant validity for each. The multiple regression analysis suggests that there is either no relation between capital intensive medical technology and the rate of illness or that there is a slight tendency for the illness rate to increase as the level of technology increases. Eight possible explanations for the findings are discussed. F&J words-hospital technology index, illness index, states, iatrogenic. regulation Since WWII, the medical sector has appropriated a larger and larger share of the U.S. GNP. In 1950 medical care consumed 4.5% of the GNP while in 1980 it consumed almost 10%. Between 1950 and 1976 national health expenditures increased from 12 billion dollars to 140 billion dollars, an increase from 4.5 to 8.6% of the gross national product. Russell (I] notes that the input of real resources used per patient day has accounted for at least half of the increases in hospital costs since 1950. Feldstein and Taylor [2] compared the average cost per patient day to the general costs of consumer prices. They estimated that 75% of the rise in hospital costs between 1955 and 1975 was due to the volume of real inputs. Only the remaining 25% can be accounted for by price increases greater than the general increase in consumer prices. It is even more paradoxical that, even though specialization (the delegation of func- tions of the G.P. to specialists) has led to a dramatic increase in the size of the labor force [3], and has accounted for over 30% of the increase in labor costs per patient day, payroll has actually accounted for a declining portion of total hospital costs. Payroll dropped from 62% of the total costs in 1955 to only 53% in 1975 [2]. A large part of the increased input is the result of investment in capital intensive technology. The cen- tral (and still expanding) place that high technology occupies in American medical practice has led a number of observers to question whether such large investments in medical technology are cost-effective or efficient [4-IO]. Despite the evidence that illness rates are a func- tion of broad socioeconomic variables rather than medical care, the argument continues because the public and important sections of the medical pro- fession believe that investment in hospital technology are as important or more important than investment in public programs designed to improve nutrition, sanitation, and the life style of the population. Con- sequently, there seems to be a need for additional evidence on the links between technology and illness. This is an extremely complex issue, and one that requires investigation from many perspectives. The present paper is intended to contribute some of the needed information. Specifically, it has three objec- tives. 1. Develop an index of hospital based medical tech- nofog) Research on the issues just mentioned requires that there is some method of measuring the available level of technology. Consequently, the first objective of this paper is to describe the methods used to develop a ‘hospital technology index’. This index is intended to assess the level of hospital based medical technology in each of the 50 states of the U.S. and the District of Columbia. 2. Describe differences between states in medical technology As explained in Appendix A, states are increasingly important units for the funding and administration of health care zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQP in the U.S.A. Consequently, it is im- portant to have some indication of the extent to which capital intensive technology is available within each state. One value of such an index is to identify states that are relatively high and relatively low in respect to medical technology. Health planners may find this useful as part of the information on which to base decisions concerning investment in medical technology. 3. Determine whether high technology is associated with low illness An index which measures the level of medical technology can also be used for a number of in- vestigations about the antecedents and consequences 75