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Innovation Diffusion under Budget Constraints: Microeconometric Evidence on Heart Attack in France

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  • Brigitte DORMONT
  • Carine MILCENT

Abstract

We study the diffusion of innovative procedures for heart attack treatment, focusing on its impact on the distributions of the cost and length of hospital stays. We perform microsimulations on a sample of 5,681 stays in French public hospitals to evaluate the impacts of adoption of new techniques by hospitals, dissemination of new techniques within hospitals, and changes in patients' characteristics. Between 1994 and 1997, French public hospitals faced two main causes of rise in costs: diffusion of innovative procedures and a worsening of patients' state. However, they were financed by a global budget, and their budgets increased very slowly. We show that they deal with their financial constraints by reducing greatly the length of stays for patients at the bottom of the distribution. This appears to have enabled hospitals to finance the diffusion of angioplasty. Obviously, such a strategy cannot be sustained in the long run without jeopardizing the quality of care.

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Bibliographic Info

Article provided by ENSAE in its journal Annals of Economics and Statistics.

Volume (Year): (2005)
Issue (Month): 79-80 ()
Pages: 697-726

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Handle: RePEc:adr:anecst:y:2005:i:79-80:p:26

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  1. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
  2. Brigitte Dormont & Carine Milcent, 2005. "How to Regulate Heterogeneous Hospitals?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(3), pages 591-621, 09.
  3. Dinardo, J. & Fortin, N.M. & Lemieux, T., 1994. "Labor Market Institutions and the Distribution of Wages, 1973-1992: a Semiparametric Approach," Cahiers de recherche 9406, Universite de Montreal, Departement de sciences economiques.
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Cited by:
  1. Laurent Gobillon & Carine Milcent, 2010. "Spatial Disparities in Hospital Performances," Working Papers 2010-19, Centre de Recherche en Economie et Statistique.
  2. repec:hal:wpaper:halshs-00586837 is not listed on IDEAS
  3. Dormont, Brigitte & Samson, Anne-Laure, 2007. "Intergenerational inequalities in GPs' earnings: experience, time and cohort effects," Economics Papers from University Paris Dauphine 123456789/6891, Paris Dauphine University.
  4. Huber, Hélène & Grignon, Michel & Dormont, Brigitte, 2006. "Health expenditure growth : reassessing the threat of ageing," Economics Papers from University Paris Dauphine 123456789/3881, Paris Dauphine University.
  5. Milcent, Carine & Dormont, Brigitte & Durand-Zaleski, Isabelle & Steg, Philippe Gabriel, 2007. "Gender differences in hospital mortality and use of percutaneous coronary intervention in acute myocardial infarction : microsimulation analysis of the 1999 nationwide french hospitals database," Economics Papers from University Paris Dauphine 123456789/5424, Paris Dauphine University.

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