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Former CREA Working Papers |
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Working Papers # 413 | | Title: | Technological adoption in health care | | Authors: | by Pedro Pita Barros and Xavier Martinez-Giralt | | Date: | 08-11-2009 | | Keywords: | health care, technology adoption, payment systems | | JEL Codes: | I11, I12, Q33 | | Abstract: | | This paper addresses the impact of payment systems on the rate of technology adoption. We present a model where technological shift is driven by demand uncertainty, increased patients’ benefit, financial variables, and the
reimbursement system to providers. Two payment systems are studied: cost
reimbursement and (two variants of) DRG. According to the system considered, adoption occurs either when patients’ benefits are large enough or when the differential reimbursement across technologies offsets the cost of adoption.
Cost reimbursement leads to higher adoption of the new technology if the rate of reimbursement is high relative to the margin of new vs. old technology reimbursement under DRG. Having larger patient benefits favors
more adoption under the cost reimbursement payment system, provided that adoption occurs initially under both payment systems. | | Download this paper in a PDF file (317.98 Kb) |  Back to the list |
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