 Is managed care restraining the adoption of technology by hospitals?Núria Mas and Janice Seinfeld Journal of Health Economics, 2008, vol. 27, issue 4, 1026-1045 Abstract: As health care costs increase, cost-control mechanisms become more widespread and it is crucial to understand their implications for the health care market. This paper examines the effect that managed care activity (based on the aim to control health care expenditure) has on the adoption of technologies by hospitals. We use a hazard rate model to investigate whether higher levels of managed care market share are associated with a decrease on medical technology adoption during the period 1982-1995. We analyze annual data on 5390 US hospitals regarding the adoption of 13 different technologies. Our results are threefold: first, we find that managed care has a negative effect on hospitals' technology acquisition for each of the 13 medical technologies in our study, and its effect is stronger for those technologies diffusing in the 1990s, when the managed care sector is at its largest. If managed care enrollment had remained at its 1984 level, there would be 5.3%, 7.3% and 4.1% more hospitals with diagnostic radiology, radiation therapy and cardiac technologies, respectively. Second, we find that the rise in managed care leads to long-term reductions in medical cost growth. Finally, we take into account that profitability analysis is one of the main dimensions considered by hospitals when deciding about the adoption of new technologies. In order to determine whether managed care affects technologies differently if they have a different cost-reimbursement ratio (CRR), we have created a unique data set with information on the cost-reimbursement for each of the 13 technologies and we find that managed care enrollment has a considerably larger negative effect on the adoption of less profitable technologies. Date: 2008 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:27:y:2008:i:4:p:1026-1045 Access Statistics for this article Journal of Health Economics is currently edited by J. P. Newhouse, A. J. Culyer, R. Frank, K. Claxton and T. McGuire More articles in Journal of Health Economics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.