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Technology Diffusion and Productivity Growth in Health Care

Listed author(s):
  • Jonathan Skinner

    ()

    (Dartmouth College and NBER)

  • Douglas Staiger

    ()

    (Dartmouth College and NBER)

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.

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File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00535
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Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 97 (2015)
Issue (Month): 5 (December)
Pages: 951-964

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Handle: RePEc:tpr:restat:v:97:y:2015:i:5:p:591-964
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