Technological Development and Medical Productivity: The Diffusion of Angioplasty in New York State
AbstractA puzzling feature of many medical innovations is that they simultaneously appear to reduce unit costs and increase total costs. We consider this phenomenon by examining the diffusion of percutaneous transluminal coronary angioplasty (PTCA)â€”a treatment for coronary artery diseaseâ€”over the past two decades. We find that growth in the use of PTCA led to higher total costs despite its lower unit cost. Over the two decades following PTCAâ€™s introduction, however, we find that the magnitude of this increase was reduced by between 10 and 20% due to the substitution of PTCA for CABG. In addition, the increased use of PTCA appears to be a productivity improvement. PTCAs that substitute for CABG cost less and have the same or better outcomes, while PTCAs that replace medical management appear to improve health by enough to justify the cost.
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Bibliographic InfoPaper provided by Harvard University Department of Economics in its series Scholarly Articles with number 2664291.
Date of creation: 2003
Date of revision:
Publication status: Published in Journal of Health Economics
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