The Role of Hospital and Market Characteristics in Invasive Cardiac Service Diffusion

46 Pages Posted: 26 Jun 2017 Last revised: 18 Apr 2025

See all articles by Jill R. Horwitz

Jill R. Horwitz

UCLA School of Law; National Bureau of Economic Research (NBER)

Charleen Hsuan

Pennsylvania State University - Department of Health Policy and Administration

Austin Nichols

The Urban Institute; Abt Associates

Date Written: June 2017

Abstract

Little is known about how the adoption and diffusion of medical innovation is related to and influenced by market characteristics such as competition. The particular complications involved in investigating these relationships in the health care sector may explain the dearth of research. We examine diagnostic angiography, percutaneous coronary interventions (PCI), and coronary artery bypass grafting (CABG), three invasive cardiac services. We document the relationship between the adoption by hospitals of these three invasive cardiac services and the characteristics of hospitals, their markets, and the interactions among them, from 1996-2014. The results show that the probability of hospitals adopting a new cardiac service depends on competition in two distinct ways: 1) hospitals are substantially more likely to adopt an invasive cardiac service if competitor hospitals also adopt new services; 2) hospitals are less likely to adopt a new service if a larger fraction of the nearby population already has geographic access to the service at a nearby hospital. The first effect is stronger, leading to the net effect of hospitals duplicating access rather than expanding access to care. In addition, for-profit hospitals are considerably more likely to adopt these cardiac services than either nonprofit or government-owned hospitals. Nonprofit hospitals in high for-profit markets are also more likely to adopt them relative to other nonprofits. These results suggest that factors other than medical need, such as a medical arms race, partially explain technological adoption.

Suggested Citation

Horwitz, Jill R. and Hsuan, Charleen and Nichols, Austin and Nichols, Austin, The Role of Hospital and Market Characteristics in Invasive Cardiac Service Diffusion (June 2017). NBER Working Paper No. w23530, Available at SSRN: https://ssrn.com/abstract=2992407

Jill R. Horwitz (Contact Author)

UCLA School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Charleen Hsuan

Pennsylvania State University - Department of Health Policy and Administration ( email )

State College, PA 16802
United States

Austin Nichols

Abt Associates ( email )

MD 20814
United States

The Urban Institute

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