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

35 Pages Posted: 5 Oct 2001 Last revised: 26 Jun 2012

See all articles by Farasat A. S. Bokhari

Farasat A. S. Bokhari

University of East Anglia (UEA) - School of Economic and Social Studies; University of East Anglia (UEA) - Centre for Competition Policy

Date Written: June 1, 2008

Abstract

The 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 more likely to adopt if HMO competition increases. Further, the latter effect is non-linear in the number of adopters. In markets where fewer than a critical number of neighboring hospitals have already adopted, the probability of adoption increases with the number of HMOs, but in markets where more than the critical number of neighbors have already adopted, the probability of adoption decreases with the number of HMOs. 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.

Keywords: Cardiac Catheterization, Hazard Rate model, Adoption Diffusion of Technology, First Adoption, Follow-on Adoption, Managed care, Discouraged Adoption, Rationalized adoption

Suggested Citation

Bokhari, Farasat A. S., Managed Care and the Adoption of Hospital Technology: The Case of Cardiac Catheterization (June 1, 2008). International Journal of Industrial Organization, Forthcoming. Available at SSRN: https://ssrn.com/abstract=284348 or http://dx.doi.org/10.2139/ssrn.284348

Farasat A. S. Bokhari (Contact Author)

University of East Anglia (UEA) - School of Economic and Social Studies ( email )

Norwich, Norfolk NR4 7TJ
United Kingdom

University of East Anglia (UEA) - Centre for Competition Policy ( email )

UEA
Norwich Research Park
Norwich, Norfolk NR47TJ
United Kingdom

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