Cost-saving vs cost-increasing healthcare technology
Define cost-saving and cost-increasing technology-based innovations, give an example of each, and analyse why a cost-increasing innovation stays in use. In-text citations required.
Editorial process
Last reviewed · August 13, 2026
Cost-increasing is not the same as wasteful
Three sentences, three tasks, and the marks are not distributed evenly across them. Defining the two categories is a paragraph of definition, and choosing an example of each is a paragraph of description; both are entry conditions rather than the assignment. The analytical question is the last one, and it contains a deliberate puzzle: if an innovation raises the cost of care, why has the health system not abandoned it? Answer that badly and you write that hospitals are wasteful or that manufacturers have captured the market. Answer it well and you show that you understand what health economics actually measures, which is not cost but the relationship between cost and outcome. A technology that costs more per patient and delivers proportionally more health is a rational purchase, and the discipline has a vocabulary for saying so precisely. Reach for that vocabulary rather than for a moral judgement about spending.
The distinction that unlocks the third question is between cost-saving and cost-effective. Cost-saving means total spending falls: a vaccine that prevents hospitalisations, a generic that replaces a branded drug, a laparoscopic technique that shortens length of stay. Cost-effective means spending rises but health rises faster, so the additional cost buys additional quality-adjusted life years at a price the payer is willing to pay. Most genuinely valuable medical technology sits in the second category rather than the first, which is why decades of innovation have coincided with decades of expenditure growth rather than with savings. Choose your cost-increasing example so that it makes this point cleanly, and name the mechanism that keeps it in use: it extends indications to patients who previously had no treatment, it improves survival or function enough to justify its incremental cost-effectiveness ratio, or reimbursement and clinical guidelines have made it the expected standard of care. Cite a source for the cost claim rather than asserting it.
Likely learning objectives
Inferred from the brief — check these against your own rubric.
- 01Distinguish cost-saving innovation from cost-effective innovation in precise terms.
- 02Select examples whose cost behaviour is documented rather than assumed.
- 03Explain expenditure growth as a consequence of technology diffusion, not only of price.
- 04Use incremental cost-effectiveness reasoning to justify a technology that raises spending.
- 05Support each empirical claim with an in-text citation, as the prompt requires.
Read the full question
Review every instruction before using the planning guidance that follows.
Course-wide instructions that accompany this question
You must proofread your paper. But do not strictly rely on your computer’s spell-checker and grammar-checker; failure to do so indicates a lack of effort on your part and you can expect your grade to suffer accordingly. Papers with numerous misspelled words and grammatical mistakes will be penalized. Read over your paper – in silence and then aloud – before handing it in and make corrections as necessary. Often it is advantageous to have a friend proofread your paper for obvious errors. Handwritten corrections are preferable to uncorrected mistakes. COST SAVING/COST INCREASING IN HEALTHCARE Use a standard 10 to 12 point (10 to 12 characters per inch) typeface. Smaller or compressed type and papers with small margins or single-spacing are hard to read. It is better to let your essay run over the recommended number of pages than to try to compress it into fewer pages. Likewise, large type, large margins, large indentations, triple-spacing, increased leading (space between lines), increased kerning (space between letters), and any other such attempts at “padding” to increase the length of a paper are unacceptable, wasteful of trees, and will not fool your professor. The paper must be neatly formatted, double-spaced with a one-inch margin on the top, bottom, and sides of each page. When submitting hard copy, be sure to use white paper and print out using dark ink. If it is hard to read your essay, it will also be hard to follow your argument. ADDITIONAL INSTRUCTIONS FOR THE CLASS Discussion Questions (DQ) Initial responses to the DQ should address all components of the questions asked, include a minimum of one scholarly source, and be at least 250 words. Successful responses are substantive (i.e., add something new to the discussion, engage others in the discussion, well-developed idea) and include at least one scholarly source. One or two sentence responses, simple statements of agreement or “good post,” and responses that are off-topic will not count as substantive. Substantive responses should be at least 150 words. I encourage you to incorporate the readings from the week (as applicable) into your responses. Weekly Participation Your initial responses to the mandatory DQ do not count toward participation and are graded separately. In addition to the DQ responses, you must post at least one reply to peers (or me) on three separate days, for a total of three replies. Participation posts do not require a scholarly source/citation (unless you cite someone else’s work). Part of your weekly participation includes viewing the weekly announcement and attesting to watching it in the comments. These announcements are made to ensure you understand everything that is due during the week. APA Format and Writing Quality Familiarize yourself with APA format and practice using it correctly. It is used for most writing assignments for your degree. Visit the Writing Center in the Student Success Center, under the Resources tab in LoudCloud for APA paper templates, citation examples, tips, etc. Points will be deducted for poor use of APA format or absence of APA format (if required). Cite all sources of information! When in doubt, cite the source. Paraphrasing also requires a citation. I highly recommend using the APA Publication Manual, 6th edition. Use of Direct Quotes I discourage overutilization of direct quotes in DQs and assignments at the Masters’ level and deduct points accordingly. As Masters’ level students, it is important that you be able to critically analyze and interpret information from journal articles and other resources. Simply restating someone else’s words does not demonstrate an understanding of the content or critical analysis of the content. It is best to paraphrase content and cite your source. COST SAVING/COST INCREASING IN HEALTHCARE LopesWrite Policy For assignments that need to be submitted to LopesWrite, please be sure you have received your report and Similarity Index (SI) percentage BEFORE you do a “final submit” to me. Once you have received your report, please review it. This report will show you grammatical, punctuation, and spelling errors that can easily be fixed. Take the extra few minutes to review instead of getting counted off for these mistakes. Review your similarities. Did you forget to cite something? Did you not paraphrase well enough? Is your paper made up of someone else’s thoughts more than your own? Visit the Writing Center in the Student Success Center, under the Resources tab in LoudCloud for tips on improving your paper and SI score. Late Policy The university’s policy on late assignments is 10% penalty PER DAY LATE. This also applies to late DQ replies. Please communicate with me if you anticipate having to submit an assignment late. I am happy to be flexible, with advance notice. We may be able to work out an extension based on extenuating circumstances. If you do not communicate with me before submitting an assignment late, the GCU late policy will be in effect. I do not accept assignments that are two or more weeks late unless we have worked out an extension. As per policy, no assignments are accepted after the last day of class. Any assignment submitted after midnight on the last day of class will not be accepted for grading. Communication Communication is so very important. There are multiple ways to communicate with me: Questions to Instructor Forum: This is a great place to ask course content or assignment questions. If you have a question, there is a good chance one of your peers does as well. This is a public forum for the class. Individual Forum: This is a private forum to ask me questions or send me messages. This will be checked at least once every 24 hours. COST SAVING/COST INCREASING IN HEALTHCARE
Turn the brief into deliverables
- 01A definition of cost-saving technology-based innovation.
- 02A definition of cost-increasing technology-based innovation.
- 03One worked example of each, with the cost effect stated and cited.
- 04An analysis of why a cost-increasing innovation continues to be used.
- 05In-text citations throughout, with a matching reference list.
Three moves, in order
Define the two categories
Set cost-saving against cost-increasing in terms of total expenditure, before any example appears.
A cost-saving example
One technology whose adoption lowered total spending, with the saving quantified and cited.
A cost-increasing example
One technology whose adoption raised spending per patient or in aggregate, again cited.
Why the expensive one survives
Separate cost-saving from cost-effective and apply the distinction to the example.
Reimbursement and standard of care
The institutional mechanisms that lock a technology in once guidelines and payment follow it.
Where the cost figures come from
Recommended databases
- CMS National Health Expenditure Accounts
- Congressional Budget Office reports
- NBER working papers
- Health Affairs
- PubMed
Search sequence
- 1.Read a national expenditure source for how much of spending growth is attributed to technology.
- 2.Find a cost-effectiveness analysis for the technology you plan to use as the cost-increasing example.
- 3.Check whether your cost-saving example has published evidence of net savings, not just lower unit price.
- 4.Look up how incremental cost-effectiveness ratios and willingness-to-pay thresholds are defined.
- 5.Confirm the reimbursement pathway that applies to your cost-increasing example.
Reference shortlist
These are authoritative starting points, not a ready-made bibliography. A qualified reviewer must confirm that each source fits the assignment and supports the claim beside which it is cited.
Nothing here is cleared for citation until you have read it.
- 01
How has U.S. spending on healthcare changed over time?
Peterson-KFF Health System Tracker · 2024
Long-run expenditure growth data, for the claim that innovation and spending have risen together.
- 02
Technology Growth and Expenditure Growth in Health Care
National Bureau of Economic Research · 2011
Chandra and Skinner's classification of medical technologies by their cost-effectiveness, which is the frame the third question needs.
- 03
National Health Expenditure Data
Centers for Medicare & Medicaid Services · 2024
Source for the aggregate spending figures that anchor either example.
- 04
CEA Registry
Center for the Evaluation of Value and Risk in Health, Tufts Medical Center · 2024
Published cost-effectiveness ratios for named technologies, which is where the incremental figures for the analysis come from.
- 05
CMS' Value-Based Programs
Centers for Medicare & Medicaid Services · 2024
The payment mechanisms that keep a costly technology in use once it becomes the expected standard of care.
Review before submission
Common mistakes
- Treating cost-increasing as a synonym for wasteful, which makes the third question unanswerable.
- Confusing cost-saving with cost-effective, so the analysis collapses into a contradiction.
- Choosing telehealth or electronic records as the cost-saving example without citing evidence that they saved money.
- Describing an innovation's clinical benefit while never stating its effect on cost.
- Answering the persistence question with market power alone and no clinical rationale.
- Omitting in-text citations when the prompt asks for them in capitals.
Submission checklist
- Both categories are defined, not just illustrated.
- There is exactly one example of each and both are named specifically.
- The cost effect of each example is stated in a direction and cited.
- The persistence answer names a mechanism, not a sentiment.
- Cost-effectiveness appears as a distinct concept from cost-saving.
- Every empirical claim carries an in-text citation.
- The reference list matches the in-text citations.
Use this guide to plan and review your own work. Follow your institution's rules and read our academic-integrity policy.
Written by
Aaron Bishop
MA, Education
assignment interpretation and research-methods coaching across disciplines
Aaron leads the EssayCrackers editorial desk. He works on how assignment briefs are read — what a rubric is actually asking for, and where students most often answer a different question than the one set.
Reviewed by
Dr. Nathan Cole
PhD, Rhetoric & Composition
Argumentation and thesis development
Nathan teaches first-year composition and directs a university writing center. He reviews EssayCrackers guides for argumentative soundness and citation accuracy.