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The Diffusion of a Medical Innovation: Is Success in the Stars?

Author

Listed:
  • Mary A. Burke

    () (Economic Research Department, Federal Reserve Bank of Boston)

  • Gary M. Fournier

    () (Department of Economics, Florida State University)

  • Kislaya Prasad

    () (Robert H. Smith School of Business, University of Maryland at College Park)

Abstract

This paper relates the diffusion of the coronary stent to the presence of prominent or “star” physicians within a local peer group. The paper uses panel data on coronary care in Florida covering the period immediately following the 1995 Food and Drug Administration (FDA) approval of the stent, a significant improvement in coronary angioplasty. Adoption timing and utilization varied considerably across doctors between 1995 and 2001. We consider the role of asymmetric social influence among physicians based on professional status. Defining “star” status as having completed residency at a top-ranked hospital, we find that the diffusion of stents by non-stars depends positively on the number of stars practicing contemporaneously at the same hospitals, while we find no social influence in the opposite direction. The findings indicate that lack of local exposure to star physicians may slow adoption, and clustering of stars in a small number of hospitals may entail welfare costs.

Suggested Citation

  • Mary A. Burke & Gary M. Fournier & Kislaya Prasad, 2007. "The Diffusion of a Medical Innovation: Is Success in the Stars?," Southern Economic Journal, Southern Economic Association, vol. 73(3), pages 588-603, January.
  • Handle: RePEc:sej:ancoec:v:73:3:y:2007:p:588-603
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    Citations

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    Cited by:

    1. H Peyton Young, 2014. "The Evolution of Social Norms," Economics Series Working Papers 726, University of Oxford, Department of Economics.
    2. SUGIHARA Shigeru & ICHIMIYA Hiroki & INUI Tomohiko & ITO Yukiko & SAITO Yukiko & IGARASHI Isao & KAWABUCHI Koichi, 2016. "How do Hospitals Adopt Advanced Treatment Techniques? An assessment through the records of AMI patients in Japan," Discussion papers 16035, Research Institute of Economy, Trade and Industry (RIETI).
    3. Patrick Bayer & Stephen L. Ross & Giorgio Topa, 2008. "Place of Work and Place of Residence: Informal Hiring Networks and Labor Market Outcomes," Journal of Political Economy, University of Chicago Press, vol. 116(6), pages 1150-1196, December.
    4. Jos L. T. Blank & Vivian G. Valdmanis, 2015. "Technology diffusion in hospitals: a log odds random effects regression model," International Journal of Health Planning and Management, Wiley Blackwell, vol. 30(3), pages 246-259, July.
    5. Marco D. Huesch & Mariko Sakakibara, 2009. "Forgetting the learning curve for a moment: how much performance is un related to own experience?," Health Economics, John Wiley & Sons, Ltd., vol. 18(7), pages 855-862.
    6. Cappellaro, Giulia & Ghislandi, Simone & Anessi-Pessina, Eugenio, 2011. "Diffusion of medical technology: The role of financing," Health Policy, Elsevier, vol. 100(1), pages 51-59, April.
    7. Richard J. Cebula, 2008. "Small Firm Size and Health Insurance: A Private Enterprise Perspective," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 24(Fall 2008), pages 51-77.
    8. Zhifeng Yin & Qiang Zhi, 2017. "Dancing with the academic elite: a promotion or hindrance of research production?," Scientometrics, Springer;Akadémiai Kiadó, vol. 110(1), pages 17-41, January.
    9. Finocchiaro Castro, Massimo & Guccio, Calogero & Pignataro, Giacomo & Rizzo, Ilde, 2014. "The effects of reimbursement mechanisms on medical technology diffusion in the hospital sector in the Italian NHS," Health Policy, Elsevier, vol. 115(2), pages 215-229.
    10. Burke, Mary A. & Fournier, Gary M. & Prasad, Kislaya, 2010. "Geographic variations in a model of physician treatment choice with social interactions," Journal of Economic Behavior & Organization, Elsevier, vol. 73(3), pages 418-432, March.
    11. Epstein, Andrew J. & Nicholson, Sean, 2009. "The formation and evolution of physician treatment styles: An application to cesarean sections," Journal of Health Economics, Elsevier, vol. 28(6), pages 1126-1140, December.
    12. Yi-Wen Tsai & Yu-Wen Wen & Weng-Foung Huang & Ken Kuo & Pei-Fen Chen & Hsin-Wei Shih & Yue-Chune Lee, 2010. "Pharmaceutical penetration of new drug and pharmaceutical market structure in Taiwan: hospital-level prescription of thiazolidinediones for diabetes," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 11(3), pages 279-290, June.
    13. Jinhyung Lee, 2015. "Network Effects of Health Information Technology: Evidence from California Hospitals," Korean Economic Review, Korean Economic Association, vol. 31, pages 359-381.
    14. Cebula, Richard, 2010. "Effects of Health Insurance and Medical Care Inflation on Voluntary Enlistment in the Army: An Empirical Study in the United States," MPRA Paper 51246, University Library of Munich, Germany.
    15. Huesch, Marco D., 2011. "Is blood thicker than water? Peer effects in stent utilization among Floridian cardiologists," Social Science & Medicine, Elsevier, vol. 73(12), pages 1756-1765.
    16. Rebecca R. Kehoe & Daniel Tzabbar, 2015. "Lighting the way or stealing the shine? An examination of the duality in star scientists' effects on firm innovative performance," Strategic Management Journal, Wiley Blackwell, vol. 36(5), pages 709-727, May.
    17. Jeffrey S. McCullough, 2008. "The adoption of hospital information systems," Health Economics, John Wiley & Sons, Ltd., vol. 17(5), pages 649-664.

    More about this item

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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