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Endogenous Technology Adoption and Medical Costs

Author

Listed:
  • Karine Lamiraud

    (ESSEC Business School)

  • Stéphane Lhuillery

    (ICN Business School, BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique)

Abstract
Despite the claimthat technology has been one of themost important drivers of healthcare spending growth over the past decades, technology variables are rarely introduced explicitly in cost equations. Furthermore, technology is often considered exogenous. Using 1996–2007 panel data on Swiss geographical areas, we assessed the impact of technology availability on per capita healthcare spending covered by basic health insurance whilst controlling for the endogeneity of health technology availability variables. Our results suggest that medical research, patent intensity and the density of employees working in the medical device industry are influential factors for the adoption of technology and can be used as instruments for technology availability variables in the cost equation. These results are similar to previous findings: CT and PET scanner adoption is associated with increased healthcare spending, whilst increased availability of percutaneous transluminal coronary angioplasty facilities is associated with reductions in per capita spending. However, our results suggest that the magnitude of these relationships is much greater in absolute value than that suggested by previous studies that did not control for the possible endogeneity of the availability of technologies.

Suggested Citation

  • Karine Lamiraud & Stéphane Lhuillery, 2016. "Endogenous Technology Adoption and Medical Costs," Post-Print hal-01512885, HAL.
    • Handle: RePEc:hal:journl:hal-01512885
    DOI: 10.1002/hec.3361
    Note: View the original document on HAL open archive server: https://hal.science/hal-01512885v2
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    3. Maynou, Laia & McGuire, Alistair & Serra-Sastre, Victoria, 2024. "What happens when the tasks dry up? Exploring the impact of medical technology on workforce planning," LSE Research Online Documents on Economics 124065, London School of Economics and Political Science, LSE Library.
    4. Véra Zabrodina & Mark Dusheiko & Karine Moschetti, 2020. "A moneymaking scan: Dual reimbursement systems and supplier‐induced demand for diagnostic imaging," Health Economics, John Wiley & Sons, Ltd., vol. 29(12), pages 1566-1585, December.
    5. Eliana Barrenho & Eric Gautier & Marisa Miraldo & Carol Propper & Christiern Rose, 2020. "Innovation Diffusion and Physician Networks: Keyhole Surgery for Cancer in the English NHS," Discussion Papers Series 638, School of Economics, University of Queensland, Australia.
    6. Patricia Ex & Cornelia Henschke, 2019. "Changing payment instruments and the utilisation of new medical technologies," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(7), pages 1029-1039, September.
    7. Laia Maynou & Alistair McGuire & Victoria Serra‐Sastre, 2024. "Efficiency and productivity gains of robotic surgery: The case of the English National Health Service," Health Economics, John Wiley & Sons, Ltd., vol. 33(8), pages 1831-1856, August.

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    More about this item

    Keywords

    patent; CT; medical research; PTCA; PET; healthcare expenditure; technology change;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • I10 - Health, Education, and Welfare - - Health - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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