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

David Cutler and Robert Huckman

No 9311, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: I1 O3 (search for similar items in EconPapers)
Date: 2002-11
New Economics Papers: this item is included in nep-hea
Note: EH
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Citations: View citations in EconPapers (4)

Published as 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.

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Journal Article: Technological development and medical productivity: the diffusion of angioplasty in New York state (2003)
Working Paper: Technological Development and Medical Productivity: The Diffusion of Angioplasty in New York State (2003)
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