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Adopting new medical technologies in Russian public hospitals: what causes inefficiency?

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Author Info

  • Liudmila Zasimova

    ()
    (National Research University Higher School of Economics, Laboratory for Economic Research in Public Sector, deputy head)

  • Sergey Shishkin

    ()
    (National Research University Higher School of Economics, Institute of Health Economics, research supervisor)

Abstract

The adoption of new medical technologies in Russian public hospitals is an important part of healthcare modernization and thus is a subject for public finance and regulation. Here we examine the decision-making process on adoption of new technologies in Russian hospitals, and the institutional environment in which they are made. We find that public hospitals operate within a strategic-institutional model of decision making and tend to adopt technologies that bring indirect benefits to their heads/physicians. Unlike Western clinics, the interests of Russian hospital heads and physicians are driven by the possibilities to obtain income from a part of hospital activities: the provision of chargeable medical services to the population, as well as receiving informal payments from patients. The specifically Russian feature of the decision-making process is that hospitals are strongly dependent on health authorities’ decisions about new equipment acquisition. The inefficiency problems arise from the contradiction between hospitals’ and authorities’ financial motivation for acquiring new technologies: hospitals tend to adopt technologies that bring benefits to their heads/physicians and minimize maintenance and servicing costs, while authorities’ main concern is initial cost of technology. The main reason for inefficiency of medical technology adoption arises from centralization of procurement of medical equipment for hospitals that creates the preconditions for rent-seeking behaviour of persons making such decisions

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Bibliographic Info

Paper provided by National Research University Higher School of Economics in its series HSE Working papers with number WP BRP 07/PA/2013.

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Length: 31 pages
Date of creation: 2013
Date of revision:
Publication status: Published in WP BRP Series: Public Administration / PA, November 2013, pages 1-31
Handle: RePEc:hig:wpaper:07/pa/2013

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Keywords: medical technology; adoption; public hospital; Russia; causes of inefficiency;

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  1. Danzon, Patricia Munch, 1982. "Hospital `profits' : The effects of reimbursement policies," Journal of Health Economics, Elsevier, vol. 1(1), pages 29-52, May.
  2. Feldstein, Martin S, 1971. "Hospital Cost Inflation: A Study of Nonprofit Price Dynamics," American Economic Review, American Economic Association, vol. 61(5), pages 853-72, December.
  3. Greer, Ann Lennarson, 1984. "Medical technology and professional dominance theory," Social Science & Medicine, Elsevier, vol. 18(10), pages 809-817, January.
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