In addition to the doctor, technology is an essential aspect of healthcare. In many parts of the world, a visit to the doctor does not feel complete without a prescription for a drug. Advanced laboratory and imaging technology is indispensable. Health technology needs to be managed in ways that improve patient access and health outcomes, while encouraging useful innovation. The development, early adoption and large-scale diffusion of technology are influenced by a wide range of stakeholders: private companies, doctors, patients and policy-makers. This chapter introduces the concept of health technology assessment (HTA) as a set of techniques for helping decision-makers make better decisions in terms of the impact on a nation's health. Thus, it goes beyond economic evaluation and also looks at issues like clinical management, need, the epidemiological situation, socioeconomic characteristics of a population, (distributional) ethics, as well as organizational and legal aspects. We provide a short introduction that defines HTA and go on to show how HTA is both a technical and political endeavour. We provide examples from different countries regarding how the concept and its application have evolved and identify fundamental differences in approach. Finally, we describe the key elements of any HTA system and describe the role of HTA for reimbursement purposes.

What is health technology assessment and where can it be applied?

The effect of health insurance on the development, adoption and diffusion of new technologies (Weisbrod 1991) is not a well-understood phenomenon. On the one hand, insurance coverage in principle provides a motivation for research and development in medical technologies. On the other, a strong, unified insurance scheme will influence provider reimbursement through a monopsony purchaser effect and related cost control measures and thus might have a negative effect on the speed of innovation.

Pharmaceutical development in the nineteenth and early twentieth centuries happened in largely unregulated environments. Medical microbiology set the stage for science-led breakthroughs and laboratory-based science – rather than empiricism – and took centre stage in the development of pharmaceuticals. Heroin was initially a drug developed by Bayer for treating whooping cough in children, Coca-Cola contained a significant amount of cocaine, aspirin was brought onto the market without any widespread clinical testing, to name but a few examples.