Adopting New Medical Technologies in Russian Public Hospitals: What Causes Inefficiency?

31 Pages Posted: 25 Nov 2013

See all articles by Liudmila Zasimova

Liudmila Zasimova

National Research University Higher School of Economics

Sergey Shishkin

National Research University Higher School of Economics

Date Written: November 25, 2013

Abstract

The adoption of new medical technologies in Russian public hospitals is an important part of healthcare modernization and thus is a subject for public finance and regulation. Here we examine the decision-making process on adoption of new technologies in Russian hospitals, and the institutional environment in which they are made. We find that public hospitals operate within a strategic-institutional model of decision making and tend to adopt technologies that bring indirect benefits to their heads/physicians. Unlike Western clinics, the interests of Russian hospital heads and physicians are driven by the possibilities to obtain income from a part of hospital activities: the provision of chargeable medical services to the population, as well as receiving informal payments from patients. The specifically Russian feature of the decision-making process is that hospitals are strongly dependent on health authorities’ decisions about new equipment acquisition. The inefficiency problems arise from the contradiction between hospitals’ and authorities’ financial motivation for acquiring new technologies: hospitals tend to adopt technologies that bring benefits to their heads/physicians and minimize maintenance and servicing costs, while authorities’ main concern is initial cost of technology. The main reason for inefficiency of medical technology adoption arises from centralization of procurement of medical equipment for hospitals that creates the preconditions for rent-seeking behaviour of persons making such decisions.

Keywords: medical technology, adoption, public hospital, Russia, causes of inefficiency

JEL Classification: I10

Suggested Citation

Zasimova, Liudmila and Shishkin, Sergey, Adopting New Medical Technologies in Russian Public Hospitals: What Causes Inefficiency? (November 25, 2013). Higher School of Economics Research Paper No. WP BRP 07/PA/2013. Available at SSRN: https://ssrn.com/abstract=2359340 or http://dx.doi.org/10.2139/ssrn.2359340

Liudmila Zasimova

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Sergey Shishkin (Contact Author)

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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