THE IMPACT OF TECHNOLOGICAL INTENSITY OF SERVICE PROVISION ON PHYSICIAN EXPENDITURES: AN EXPLORATORY INVESTIGATION

Advances in technology and subsequent changes in clinical practice can lead to increases in healthcare costs. Our objective is to assess the impact that changes in the technological intensity of physician-provided health services have had on the age pattern of both the volume of services provided and the average expenditures associated with them. We based our analysis on age-sex-specific patient-level administrative records of diagnoses and treatments. These records include virtually all physician services provided in the province of Ontario, Canada in a 10-year span ending in 2004 and their associated costs. An algorithm is developed to classify services and their costs into three levels of technological intensity. We find that while the overall age-standardized level and cost of services per capita have decreased, the volume and cost of high technologically intensive treatments have increased, especially among older patients.