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Managed Care and Technology Adoption in Health Care: Evidence from Magnetic Resonance Imaging

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  • Laurence C. Baker

Abstract

Increasing managed care activity could influence the adoption and diffusion of new medical technologies. This paper empirically examines the relationship between HMO market share and the diffusion of magnetic resonance imaging (MRI) equipment. Across markets, increases in HMO market share are associated with slower diffusion of MRI into hospitals between 1983 and 1993, and with substantially lower overall MRI availability in and outside of hospitals in the mid and later 1990s. High managed care areas also had markedly lower rates of MRI procedure use. These results suggest that technology adoption in health care can respond to changes in financial and other incentives associated with managed care, which may have implications for health care costs and patient welfare.

Suggested Citation

  • 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.
  • Handle: RePEc:nbr:nberwo:8020
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    2. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-782, July.
    3. 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.
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    7. Louise B. Russell, 1977. "The Diffusion of Hospital Technologies: Some Econometric Evidence," Journal of Human Resources, University of Wisconsin Press, vol. 12(4), pages 482-502.
    8. Globerman, Steven, 1982. "The adoption of computer technology in hospitals," Journal of Behavioral Economics, Elsevier, vol. 11(2), pages 67-95.
    9. Laurence C. Baker & Martin L. Brown, 1999. "Managed Care, Consolidation Among Health Care Providers, and Health Care: Evidence from Mammography," RAND Journal of Economics, The RAND Corporation, vol. 30(2), pages 351-374, Summer.
    10. Hill, Steven C. & Wolfe, Barbara L., 1997. "Testing the HMO competitive strategy: An analysis of its impact on medical care resources," Journal of Health Economics, Elsevier, vol. 16(3), pages 261-286, June.
    11. Noether, Monica, 1988. "Competition among hospitals," Journal of Health Economics, Elsevier, vol. 7(3), pages 259-284, September.
    12. Romeo, Anthony A. & Wagner, Judith L. & Lee, Robert H., 1984. "Prospective reimbursement and the diffusion of new technologies in hospitals," Journal of Health Economics, Elsevier, vol. 3(1), pages 1-24, April.
    13. Laurence C. Baker & Ciaran S. Phibbs, 2000. "Managed Care, Technology Adoption, and Health Care: The Adoption of Neonatal Intensive Care," NBER Working Papers 7883, National Bureau of Economic Research, Inc.
    14. Baker, Laurence C & Corts, Kenneth S, 1996. "HMO Penetration and the Cost of Health Care: Market Discipline or Market Segmentation?," American Economic Review, American Economic Association, vol. 86(2), pages 389-394, May.
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    16. Fuchs, Victor R, 1996. "Economics, Values, and Health Care Reform," American Economic Review, American Economic Association, vol. 86(1), pages 1-24, March.
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    Cited by:

    1. Vita, Michael G., 2001. "Regulatory restrictions on selective contracting: an empirical analysis of "any-willing-provider" regulations," Journal of Health Economics, Elsevier, vol. 20(6), pages 955-966, November.
    2. Eliasson, Gunnar & Eliasson, ├ůsa, 2004. "Competence in Health Care - An Industrial Systems Analysis Using Competence Bloc Theory to Compare European and US Health Care," Ratio Working Papers 46, The Ratio Institute.
    3. Lakdawalla, Darius N. & Seabury, Seth A., 2012. "The welfare effects of medical malpractice liability," International Review of Law and Economics, Elsevier, vol. 32(4), pages 356-369.
    4. Adriana Lleras-Muney & Frank R. Lichtenberg, 2002. "The Effect of Education on Medical Technology Adoption: Are the More Educated More Likely to Use New Drugs," NBER Working Papers 9185, National Bureau of Economic Research, Inc.
    5. Mark Duggan & Jonathan Gruber & Boris Vabson, 2015. "The Efficiency Consequences of Health Care Privatization: Evidence from Medicare Advantage Exits," NBER Working Papers 21650, National Bureau of Economic Research, Inc.

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    JEL classification:

    • I1 - Health, Education, and Welfare - - Health

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