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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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    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00535
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    Keywords

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    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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