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Technology Diffusion and Productivity Growth in Health Care

Author

Listed:
  • Jonathan Skinner

    () (Dartmouth College and NBER)

  • Douglas Staiger

    () (Dartmouth College and NBER)

Abstract

We draw on macroeconomic models of diffusion and productivity to explain empirical patterns of survival gains in heart attacks. Using Medicare data for 2.8 million patients from 1986 to 2004, we find that hospitals rapidly adopting cost-effective innovations such as beta blockers, aspirin, and reperfusion had substantially better outcomes for their patients. Holding technology adoption constant, the marginal returns to spending were relatively modest. Hospitals increasing the pace of technology diffusion (“tigers”) experienced triple the survival gains compared to those with diminished rates (“tortoises”). In sum, small differences in the propensity to adopt effective technology lead to wide productivity differences across hospitals.

Suggested Citation

  • Jonathan Skinner & Douglas Staiger, 2015. "Technology Diffusion and Productivity Growth in Health Care," The Review of Economics and Statistics, MIT Press, vol. 97(5), pages 951-964, December.
  • Handle: RePEc:tpr:restat:v:97:y:2015:i:5:p:591-964
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    Cited by:

    1. 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).
    2. Adam Sacarny, 2018. "Adoption and Learning Across Hospitals: The Case of a Revenue-Generating Practice," NBER Working Papers 24497, National Bureau of Economic Research, Inc.
    3. Amitabh Chandra & Amy Finkelstein & Adam Sacarny & Chad Syverson, 2015. "Healthcare Exceptionalism? Performance and Allocation in the U.S. Healthcare Sector," NBER Working Papers 21603, National Bureau of Economic Research, Inc.
    4. French, Declan, 2014. "International mortality modelling—An economic perspective," Economics Letters, Elsevier, vol. 122(2), pages 182-186.
    5. Baltagi, Badi H. & Yen, Yin-Fang, 2014. "Hospital treatment rates and spillover effects: Does ownership matter?," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 193-202.
    6. Badi Baltagi & Francesco Moscone & Elisa Tosetti, 2012. "Medical technology and the production of health care," Empirical Economics, Springer, vol. 42(2), pages 395-411, April.
    7. Juan Contreras & Elena Patel & Ignez Tristao, 2013. "Production Factors, Productivity Dynamics and Quality Gains as Determinants of Healthcare Spending Growth in U.S. Hospitals," Working Papers 2013-13, Banco de México.
    8. John A. Romley & Neeraj Sood, 2013. "Identifying the Health Production Function: The Case of Hospitals," NBER Working Papers 19490, National Bureau of Economic Research, Inc.
    9. Laurent Gobillon & Carine Milcent, 2011. "Innovative procedures: the key factor for hospital performance," Working Papers halshs-00653441, HAL.
    10. Stephen Hall & P. Swamy & George Tavlas, 2012. "Generalized cointegration: a new concept with an application to health expenditure and health outcomes," Empirical Economics, Springer, vol. 42(2), pages 603-618, April.
    11. Raquel Fonseca & Pierre-Carl Michaud & Arie Kapteyn & Titus Galama, 2013. "Accounting for the Rise of Health Spending and Longevity," Cahiers de recherche 1326, CIRPEE.
    12. Laurent Gobillon & Carine Milcent, 2016. "Evaluating the Effect of Ownership Status on Hospital Quality: The Key Role of Innovative Procedures," Annals of Economics and Statistics, GENES, issue 121-122, pages 161-186.
    13. Daysal, N. Meltem, 2012. "Does uninsurance affect the health outcomes of the insured? Evidence from heart attack patients in California," Journal of Health Economics, Elsevier, vol. 31(4), pages 545-563.
    14. Uchenna Efobi & Belmondo Tanankem & Simplice Asongu, 2018. "Female Economic Participation with Information and Communication Technology (ICT) Advancement: Evidence from Sub-Saharan Africa," Working Papers 18/005, African Governance and Development Institute..
    15. repec:kap:atlecj:v:45:y:2017:i:4:d:10.1007_s11293-017-9557-3 is not listed on IDEAS
    16. repec:ohe:monogr:001664 is not listed on IDEAS
    17. Jing Hua Zhang, 2015. "Bend the healthcare cost curve without pain? The health outcome after the Medicare reimbursement cut in 1997," International Journal of Health Planning and Management, Wiley Blackwell, vol. 30(2), pages 164-172, April.
    18. Jill R. Horwitz & Charleen Hsuan & Austin Nichols, 2017. "The Role of Hospital and Market Characteristics in Invasive Cardiac Service Diffusion," NBER Working Papers 23530, National Bureau of Economic Research, Inc.
    19. Spyros Arvanitis & Euripidis N. Loukis, 2014. "Investigating the effects of ICT on innovation and performance of European hospitals," KOF Working papers 14-366, KOF Swiss Economic Institute, ETH Zurich.
    20. Amitabh Chandra & Amy Finkelstein & Adam Sacarny & Chad Syverson, 2013. "Healthcare Exceptionalism? Productivity and Allocation in the U.S. Healthcare Sector," NBER Working Papers 19200, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    technology; health care; productivity; survival gains; innovation;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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