Technology Adoption and Market Allocation:The Case of Robotic Surgery

Danea Horn, Adam Sacarny and R. Annetta Zhou

No 29301, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The adoption of healthcare technology is central to improving productivity in this sector. To provide new evidence on how technology affects healthcare markets, we focus on one area where adoption has been particularly rapid: surgery for prostate cancer. Over just six years, robotic surgery grew to become the dominant intensive prostate cancer treatment method. Using a difference-in-differences design, we show that adopting a robot drives prostate cancer patients to the hospital. To test whether this result reflects market expansion or business stealing, we also consider market-level effects of adoption and find they are significant but smaller, suggesting that adoption expands the market while also reallocating some patients across hospitals. Marginal patients are relatively young and healthy, inconsistent with the concern that adoption broadens the criteria for intervention to patients who would gain little from it. We conclude by discussing implications for the social value of technology diffusion in healthcare markets.

JEL-codes: I1 L1 (search for similar items in EconPapers)
Date: 2021-09
New Economics Papers: this item is included in nep-hea and nep-tid
Note: EH
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Citations: View citations in EconPapers (5)

Published as Horn, Danea & Sacarny, Adam & Zhou, Annetta, 2022. "Technology adoption and market allocation: The case of robotic surgery," Journal of Health Economics, Elsevier, vol. 86(C).

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