IDEAS home Printed from https://ideas.repec.org/p/hrv/faseco/2664291.html
   My bibliography  Save this paper

Technological Development and Medical Productivity: The Diffusion of Angioplasty in New York State

Author

Listed:
  • Cutler, David
  • Huckman, Robert

Abstract

A puzzling feature of many medical innovations is that they simultaneously appear to reduce unit costs and increase total costs. We consider this phenomenon by examining the diffusion of percutaneous transluminal coronary angioplasty (PTCA)—a treatment for coronary artery disease—over the past two decades. We find that growth in the use of PTCA led to higher total costs despite its lower unit cost. Over the two decades following PTCA’s introduction, however, we find that the magnitude of this increase was reduced by between 10 and 20% due to the substitution of PTCA for CABG. In addition, the increased use of PTCA appears to be a productivity improvement. PTCAs that substitute for CABG cost less and have the same or better outcomes, while PTCAs that replace medical management appear to improve health by enough to justify the cost.

Suggested Citation

  • Cutler, David & Huckman, Robert, 2003. "Technological Development and Medical Productivity: The Diffusion of Angioplasty in New York State," Scholarly Articles 2664291, Harvard University Department of Economics.
  • Handle: RePEc:hrv:faseco:2664291
    as

    Download full text from publisher

    File URL: http://dash.harvard.edu/bitstream/handle/1/2664291/cutler_techdev.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Viscusi, W Kip, 1993. "The Value of Risks to Life and Health," Journal of Economic Literature, American Economic Association, vol. 31(4), pages 1912-1946, December.
    2. Berndt, Ernst R. & Morrison, Catherine J., 1995. "High-tech capital formation and economic performance in U.S. manufacturing industries An exploratory analysis," Journal of Econometrics, Elsevier, vol. 65(1), pages 9-43, January.
    3. Mark McClellan & Douglas Staiger, 1999. "The Quality of Health Care Providers," NBER Working Papers 7327, National Bureau of Economic Research, Inc.
    4. David Meltzer & Jeanette Chung, 2001. "Effects of Competition under Prospective Payment on Hospital Costs among High and Low Cost Admissions: Evidence from California, 1983 - 1993," NBER Working Papers 8069, National Bureau of Economic Research, Inc.
    5. Wise, David A. (ed.), 1998. "Inquiries in the Economics of Aging," National Bureau of Economic Research Books, University of Chicago Press, number 9780226903033, Febrero.
    6. Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 3-21, Summer.
    7. Weisbrod, Burton A, 1991. "The Health Care Quadrilemma: An Essay on Technological Change, Insurance, Quality of Care, and Cost Containment," Journal of Economic Literature, American Economic Association, vol. 29(2), pages 523-552, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cutler, David M. & Huckman, Robert S., 2003. "Technological development and medical productivity: the diffusion of angioplasty in New York state," Journal of Health Economics, Elsevier, vol. 22(2), pages 187-217, March.
    2. Kurt Hornschild & Stephan Raab & Jörg-Peter Weiß, 2005. "Die Medizintechnik am Standort Deutschland: Chancen und Risiken durch technologische Innovationen, Auswirkungen auf und durch das nationale Gesundheitssystem sowie potentielle Wachstumsmärkte im Ausla," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, edition 2, volume 10, number pbk10.
    3. Daron Acemoglu & Amy Finkelstein, 2008. "Input and Technology Choices in Regulated Industries: Evidence from the Health Care Sector," Journal of Political Economy, University of Chicago Press, vol. 116(5), pages 837-880, October.
    4. Wasem, Jurgen, 1997. "A study on decentralizing from acute care to home care settings in Germany," Health Policy, Elsevier, vol. 41(Supplemen), pages 109-129, September.
    5. Jacques H. Drèze, 1997. "Sur la spécificité économique des soins de santé," Économie et Prévision, Programme National Persée, vol. 129(3), pages 1-9.
    6. Djellal, Faridah & Gallouj, FaIz, 2005. "Mapping innovation dynamics in hospitals," Research Policy, Elsevier, vol. 34(6), pages 817-835, August.
    7. Laurence Baker & Joanne Spetz, 1999. "Managed Care and Medical Technology Growth," NBER Chapters, in: Frontiers in Health Policy Research, volume 2, pages 27-52, National Bureau of Economic Research, Inc.
    8. Esther Gal‐Or, 1994. "Excessive Investment in Hospital Capacities," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 53-70, March.
    9. Borger, Christine & Rutherford, Thomas F. & Won, Gregory Y., 2008. "Projecting long term medical spending growth," Journal of Health Economics, Elsevier, vol. 27(1), pages 69-88, January.
    10. Laurence C. Baker, 2000. "Managed Care and Technology Adoption in Health Care: Evidence from Magnetic Resonance Imaging," NBER Working Papers 8020, National Bureau of Economic Research, Inc.
    11. Karine Lamiraud & Stephane Lhuillery, 2016. "Endogenous Technology Adoption and Medical Costs," Health Economics, John Wiley & Sons, Ltd., vol. 25(9), pages 1123-1147, September.
    12. Kristopher J. Hult & Tomas J. Philipson, 2012. "Public Liabilities and Health Care Policy," NBER Working Papers 18571, National Bureau of Economic Research, Inc.
    13. Freedman, Seth & Lin, Haizhen & Simon, Kosali, 2015. "Public health insurance expansions and hospital technology adoption," Journal of Public Economics, Elsevier, vol. 121(C), pages 117-131.
    14. David M. Cutler & Ellen Meara & Seth Richards-Shubik, 2012. "Induced Innovation and Social Inequality: Evidence from Infant Medical Care," Journal of Human Resources, University of Wisconsin Press, vol. 47(2), pages 456-492.
    15. Astolfi, Roberto & Lorenzoni, Luca & Oderkirk, Jillian, 2012. "Informing policy makers about future health spending: A comparative analysis of forecasting methods in OECD countries," Health Policy, Elsevier, vol. 107(1), pages 1-10.
    16. Khwaja, Ahmed, 2010. "Estimating willingness to pay for medicare using a dynamic life-cycle model of demand for health insurance," Journal of Econometrics, Elsevier, vol. 156(1), pages 130-147, May.
    17. Chalkley, Martin & Malcomson, James M., 2002. "Cost sharing in health service provision: an empirical assessment of cost savings," Journal of Public Economics, Elsevier, vol. 84(2), pages 219-249, May.
    18. David M. Cutler & Ellen Meara, 2000. "The Technology of Birth: Is It Worth It?," NBER Chapters, in: Frontiers in Health Policy Research, Volume 3, pages 33-68, National Bureau of Economic Research, Inc.
    19. Brian Nolan, 1994. "Affordability versus Quality, Effectiveness and Equity in Health Care: Is there a Trade-Off?," Papers WP055, Economic and Social Research Institute (ESRI).
    20. Joseph P. Newhouse, 2001. "Medical Care Price Indices: Problems and Opportunities / The Chung-Hua Lectures," NBER Working Papers 8168, National Bureau of Economic Research, Inc.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hrv:faseco:2664291. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/deharus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Office for Scholarly Communication (email available below). General contact details of provider: https://edirc.repec.org/data/deharus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.