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Innovation Diffusion under Budget Constraints: Microeconometric Evidence on Heart Attack in France

In: Contributions in Memory of Zvi Griliches

  • Brigitte Dormont
  • Carine Milcent

We study the diffusion ofinnovative procedures for heart attack treatment, focusing on its impact on the distributions of the cost and length of hospital stays. We perform microsimulations on a sample of5,681 stays in Franch public hospitals to evaluate the impacts of adoption of new techniques by hospitals, dissemination of new techniques within hospitals, and changes in patients characteristics. Between 1994 and 1997, French public hospitals faced two main causes of rise in costs: diffusion of innovative procedures and a worsening of patients' state. However, they were financed by a global budget, and their budgets increased very slowly. We show that they deal with their financial constraints by reducing greatly the length os stays for patients at the bottom of the distribution. This appears to have enabled hospitals to finance the diffusion of angioplasty. Obviously, such a strategy cnnot be sustained in the long run without jeopardizing the quality of care.

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This chapter was published in:
  • Jacques Mairesse & Manuel Trajtenberg, 2010. "Contributions in Memory of Zvi Griliches," NBER Books, National Bureau of Economic Research, Inc, number mair10-1, March.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 12251.
    Handle: RePEc:nbr:nberch:12251
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    1. Nidardo, J. & Fortin, N. & Lemieux, T., 1994. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Papers 93-94-15, California Irvine - School of Social Sciences.
    2. Brigitte Dormont & Carine Milcent, 2003. "How to regulate heterogenous hospitals?," DELTA Working Papers 2003-19, DELTA (Ecole normale supérieure).
    3. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
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