Technology and Development


Discussion Paper

Correcting signals for innovation in health care

October 7, 2015, Nicholas Bagley, Amitabh Chandra and Austin Frakt

When Americans select health insurance, they cannot choose what technologies and treatments to include in their coverage. The fact that Americans have little choice but to buy widely-inclusive coverage sends a distorted signal to medical technology developers—that society is willing to pay practically any price for treatments that offer only incremental health benefits over existing technology. Nicholas Bagley, Amitabh Chandra and Austin Frakt propose three reforms to make health insurance, and ultimately medical innovation, reflect what consumers value.