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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

This paper studies the relationship between the diffusion of innovative procedures for the treatment of heart attack and the distributions of the cost and length of hospital stays. Using a sample of 5,681 stays observed in French publics hospitals, we use micro-simulation techniques in order to highlight various effects on the shifts in the overall distributions of the costs and length of stays: (i) the effect of the adoption of new techniques by hospitals (between hospital diffusion); (ii) the effect of the diffusion of technological progress within hospitals; (iii) the effect of the evolutions of patients characteristics (age x gender, co-morbidities). This decomposition approach is used in the literature relative to the relationship between education and income distribution where observed distributions are compared to counterfactual distributions built by replacing some estimated parameters with their counterparts estimated from another country or period. Our results show that between 1994 and 1997 hospitals faced two main causes of rises in costs: on the one hand, diffusion of technological progress, with increasing use of costly innovative procedures such as angioplasty; on the other hand, patients' epidemiological state worsened, since they became older and had more secondary diagnoses. These two factors induced sizeable shocks in cost distributions. During the same period, French public hospitals were financed by a global budget, and their budgets increased very slowly. International comparisons show that diffusion of technological progress for AMI treatment is similar in France and in comparable countries. How did French hospitals deal with their financial constraints? Our results show that they sharply reduced the length of stays for patients at the bottom of the distribution. This reduction in the length of stays appears to have been a condition for the diffusion of angioplasty. Obviously, such a condition cannot be sustained in the long run without jeopardizing quality of care.

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Paper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 2004-11.

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Date of creation: 2004
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Handle: RePEc:del:abcdef:2004-11

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  1. John DiNardo & Nicole M. Fortin & Thomas Lemieux, 1995. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," NBER Working Papers 5093, National Bureau of Economic Research, Inc.
  2. Brigitte Dormont, 2003. "How to Regulate Heterogeneous Hospistals," THEMA Working Papers 2003-11, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
  3. 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.
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Cited by:
  1. Brigitte Dormont & Michel Grignon & Hélène Huber, 2006. "Health expenditure growth: reassessing the threat of ageing," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 947-963.
  2. Laurent Gobillon & Carine Milcent, 2010. "Spatial Disparities in Hospital Performances," Working Papers 2010-19, Centre de Recherche en Economie et Statistique.
  3. Brigitte Dormont & Anne-Laure Samson, 2007. "Intergenerational inequalities in GPs' earnings : experience, time and cohort effects," Working Papers 0704, University of Lausanne, Institute of Health Economics and Management (IEMS).
  4. repec:hal:wpaper:halshs-00586837 is not listed on IDEAS
  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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