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Is managed care restraining the adoption of technology by hospitals?

April 26, 2017adoption hospitals managed restraining Technology

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Is managed care restraining the adoption of technology by hospitals?

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Author InfoMas, Núria Seinfeld, Janice Abstract As health care costs increase, cost-control mechanisms become more widespread and it is crucial to understand their implications for the health care market. This paper examines the effect that managed care activity (based on the aim to control health care expenditure) has on the adoption of technologies by hospitals. We use a hazard rate model to investigate whether higher levels of managed care market share are associated with a decrease on medical technology adoption during the period 1982-1995. We analyze annual data on 5390 US hospitals regarding the adoption of 13 different technologies. Our results are threefold: first, we find that managed care has a negative effect on hospitals’ technology acquisition for each of the 13 medical technologies in our study, and its effect is stronger for those technologies diffusing in the 1990s, when the managed care sector is at its largest. If managed care enrollment had remained at its 1984 level