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Managed Care and the Adoption of Hospital Technology: The Case of Cardiac Catherterization

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  • Farasat A.S. Bokhari

    (Department of Economics, Florida State University)

Abstract

Diffusion of health care technology is influenced by both the total market share of managed care organizations as well as the level of competition among them. This paper differentiates between HMO penetration and competition and examines their relationship to the adoption of cardiac catheterization laboratories in all non-federal, short-term general community hospitals in the U.S. between 1985-1995. Results show that a hospital is less likely to adopt the technology if HMO market penetration increases but that it is more likely to adopt if HMO competition increases. Further, the competition effect is non-linear. In markets where fewer than 10 neighbors have already adopted, the probability of adoption increases with HMO competition but in markets where 10 or more neighbors have already adopted, the probability of adoption decreases with HMO competition. Thus, in markets where technology is rare, HMO penetration and competition have countervailing effects on the diffusion of technology such that the net effect could be small.

Suggested Citation

  • Farasat A.S. Bokhari, 2001. "Managed Care and the Adoption of Hospital Technology: The Case of Cardiac Catherterization," Working Papers wp2001_10_02, Department of Economics, Florida State University, revised Feb 2006.
  • Handle: RePEc:fsu:wpaper:wp2001_10_02
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    File URL: http://129.3.20.41/eps/hew/papers/0110/0110001.pdf
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    References listed on IDEAS

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    Cited by:

    1. Rosella Levaggi & Michele Moretto & Vincenzo Rebba, 2009. "Investment decisions in hospital technology when physicians are devoted workers," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(5), pages 487-512.
    2. Rosella Levaggi & Moretto Michele, 2008. "Investment In Hospital Care Technology Under Different Purchasing Rules: A Real Option Approach," Bulletin of Economic Research, Wiley Blackwell, vol. 60(2), pages 159-181, April.
    3. Farasat A.S. Bokhari & Weijie Yan, 2020. "Product line extensions under the threat of entry: evidence from the UK pharmaceuticals market," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2020-04, Centre for Competition Policy, University of East Anglia, Norwich, UK..

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    More about this item

    Keywords

    Managed Care; HMO Competition; Hospital Technology Adoption; Discrete Time Hazard Rate Model;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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