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Where Are the Health Care Entrepreneurs? The Failure of Organizational Innovation in Health Care

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  • Cutler, David M.

Abstract

Medical care is characterized by enormous inefficiency. Costs are higher and outcomes worse than almost all analyses of the industry suggest should occur. In other industries characterized by inefficiency, efficient firms expand to take over the market, or new firms enter to eliminate inefficiencies. This has not happened in medical care, however. This paper explores the reasons for this failure of innovation. I identify two factors as being particularly important in organizational stagnation: public insurance programs that are oriented to volume of care and not value, and inadequate information about quality of care. Recent reforms have aspects that bear on these problems.

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  • Cutler, David M., 2010. "Where Are the Health Care Entrepreneurs? The Failure of Organizational Innovation in Health Care," Scholarly Articles 5345877, Harvard University Department of Economics.
    • Handle: RePEc:hrv:faseco:5345877
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    Cited by:

    1. Foray, D. & Raffo, J., 2014. "The emergence of an educational tool industry: Opportunities and challenges for innovation in education," Research Policy, Elsevier, vol. 43(10), pages 1707-1715.
    2. Amitabh Chandra & Jonathan S. Skinner, 2011. "Technology Growth and Expenditure Growth in Health Care," NBER Working Papers 16953, National Bureau of Economic Research, Inc.
    3. Gaynor, Martin & Town, Robert J., 2011. "Competition in Health Care Markets," Handbook of Health Economics, in: Mark V. Pauly & Thomas G. Mcguire & Pedro P. Barros (ed.), Handbook of Health Economics, volume 2, chapter 0, pages 499-637, Elsevier.
    4. Amitabh Chandra & Jonathan Skinner, 2012. "Technology Growth and Expenditure Growth in Health Care," Journal of Economic Literature, American Economic Association, vol. 50(3), pages 645-680, September.
    5. Agha, Leila, 2014. "The effects of health information technology on the costs and quality of medical care," Journal of Health Economics, Elsevier, vol. 34(C), pages 19-30.

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