Where Are The Health Care Entrepreneurs? The Failure of Organizational Innovation in Health Care

David Cutler

No 16030, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Medical care is characterized by enormous inefficiency. Costs are higher and outcomes worse than almost all analyses of the industry suggest should occur. In other industries characterized by inefficiency, efficient firms expand to take over the market, or new firms enter to eliminate inefficiencies. This has not happened in medical care, however. This paper explores the reasons for this failure of innovation. I identify two factors as being particularly important in organizational stagnation: public insurance programs that are oriented to volume of care and not value, and inadequate information about quality of care. Recent reforms have aspects that bear on these problems.

JEL-codes: I1 L0 (search for similar items in EconPapers)
Date: 2010-05
Note: EH IO PR
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Citations: View citations in EconPapers (8)

Published as Where Are the Health Care Entrepreneurs? The Failure of Organizational Innovation in Health Care , David M. Cutler. in Innovation Policy and the Economy, Volume 11 , Lerner and Stern. 2010

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Chapter: Where Are the Health Care Entrepreneurs? The Failure of Organizational Innovation in Health Care (2011)
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