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Managed care competition and the adoption of hospital technology: The case of cardiac catheterization

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  • Bokhari, Farasat A.S.

Abstract

The diffusion of health care technology is influenced by both the total market share of managed care organizations as well as the level of competition among them. This paper differentiates between HMO penetration and competition and examines their relationship to the adoption of cardiac catheterization laboratories in all non-federal, short-term general community hospitals in the U.S. between 1985 and 1995. Results show that a hospital is less likely to adopt the technology if HMO market penetration increases but more likely to adopt if HMO competition increases. Further, the latter effect is non-linear in the number of adopters. In markets where fewer than a critical number of neighboring hospitals have already adopted, the probability of adoption increases with the number of HMOs, but in markets where more than the critical number of neighbors have already adopted, the probability of adoption decreases with the number of HMOs. Thus, in markets where technology is rare, HMO penetration and competition have countervailing effects on the diffusion of technology such that the net effect could be small.

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Bibliographic Info

Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 27 (2009)
Issue (Month): 2 (March)
Pages: 223-237

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Handle: RePEc:eee:indorg:v:27:y:2009:i:2:p:223-237

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Web page: http://www.elsevier.com/locate/inca/505551

Related research

Keywords: HMO competition HMO penetration Hospital technology adoption Discrete time Hazard rate model;

References

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Cited by:
  1. Finocchiaro Castro, Massimo & Guccio, Calogero & Pignataro, Giacomo & Rizzo, Ilde, 2014. "The effects of reimbursement mechanisms on medical technology diffusion in the hospital sector in the Italian NHS," Health Policy, Elsevier, vol. 115(2), pages 215-229.
  2. Weech-Maldonado, Robert & Elliott, Marc N. & Pradhan, Rohit & Schiller, Cameron & Dreachslin, Janice & Hays, Ron D., 2012. "Moving towards culturally competent health systems: Organizational and market factors," Social Science & Medicine, Elsevier, vol. 75(5), pages 815-822.
  3. Levaggi, R. & Moretto, M. & Pertile, P., 2012. "Static and dynamic efficiency of irreversible health care investments under alternative payment rules," Journal of Health Economics, Elsevier, vol. 31(1), pages 169-179.
  4. Pedro Pita Barros & Xavier Martinez-Giralt, 2009. "Technological adoption in health care," UFAE and IAE Working Papers 790.09, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).

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