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. JEL codes: I11, I12, Q33
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Bibliographic InfoPaper provided by Universidade Nova de Lisboa, Faculdade de Economia in its series FEUNL Working Paper Series with number wp545.
Length: 36 pages
Date of creation: 2010
Date of revision:
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.
- 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).
- Pedro Pita Barros & Xavier Martinez-Giralt, 2009. "Technological adoption in health care," Working Papers 413, Barcelona Graduate School of Economics.
- 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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