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Hospital competition and technology adoption: An econometric analysis of imaging technology in Japan

Rei Goto and Hirotaka Kato

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: The aim of this study is to examine the relationship between the competition between hospitals in Japan and the investment in specialists and advanced medical technologies, which are a major determinant of costs and quality in health care. We focus the analysis on the adoption of computed tomography (CT) and magnetic resonance imaging (MRI) scanners, as well as on the number of full-time radiologists working in each medical institution. Hospitals are evaluated based on the total availability of services, including both radiologists and cutting-edge imaging equipment, rather than on the availability of individual services. Therefore, in this study, we measure the adoption of advanced imaging technologies at both the aggregate and the single-technology levels. Based on an instrumental variable approach, we find that competition is positively correlated to the overall adoption of advanced imaging technologies, higher performance CT scanners, and to the number of radiologists. Additionally, we examine whether this relationship varies with governance structure of hospitals. The results suggest that private hospitals are particularly sensitive to competition in comparison to non-private hospitals.

Date: 2019-03
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Handle: RePEc:eti:dpaper:19013