Technological adoption in health care
AbstractThis paper addresses the impact of payment systems on the rate of technology adoption. We present a model where technological shift is driven by demand uncertainty, increased patients benefit, financial variables, and the reimbursement system to providers. Two payment systems are studied: cost reimbursement and (two variants of) DRG. According to the system considered, adoption occurs either when patients benefits are large enough or when the differential reimbursement across technologies offsets the cost of adoption. Cost reimbursement leads to higher adoption of the new technology if the rate of reimbursement is high relative to the margin of new vs. old technology reimbursement under DRG. Having larger patient benefits favors more adoption under the cost reimbursement payment system, provided that adoption occurs initially under both payment systems.
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Bibliographic InfoPaper provided by Barcelona Graduate School of Economics in its series Working Papers with number 413.
Date of creation: Nov 2009
Date of revision:
health care; technology adoption; payment systems;
Other versions of this item:
- Barros, Pedro Luis Pita & Martinez-Giralt, Xavier, 2009. "Technological adoption in health care," CEPR Discussion Papers 7558, C.E.P.R. Discussion Papers.
- Barros, Pedro Pita & Martinez-Giralt, Xavier, 2010. "Technological adoption in health care," FEUNL Working Paper Series wp545, Universidade Nova de Lisboa, Faculdade de Economia.
- 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).
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- I12 - Health, Education, and Welfare - - Health - - - Health Production
- Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
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