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11The Diffusion of NewMedical TechnologyThe Case of Drug-Eluting Stents

11The Diffusion of NewMedical TechnologyThe Case of Drug-Eluting Stents

Chapter:
(p.389) 11The Diffusion of NewMedical TechnologyThe Case of Drug-Eluting Stents
Source:
Discoveries in the Economics of Aging
Author(s):
Amitabh ChandraDavid MalenkaJonathan Skinner
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226146126.003.0012

There is considerable variation across hospitals and regions in the diffusion of new medical technologies. Before 2003, bare-metal stents were used by cardiologists seeking to perform revascularization for blockages in the heart. In April of 2003, the FDA approved the use of coated antiproliferative but more expensive drugeluting stents, designed to reduce renarrowing of the artery at the location of the original stent. Adoption was rapid but uneven; in the year following their introduction, drugeluting stents comprised 83% of total stents among Medicare enrollees in the top quintile of hospitals, but just 33% in the low quintile hospitals. We used the Medicare claims data to test several models of diffusion, and found empirical support for models of expertise (better quality hospitals adopt quicker) and spillover models with correlated diffusion rates. There is suggestive evidence that hospitals that gained the greatest incremental benefit from drugeluting stents diffused more rapidly, but there is no support for either models of competition, knowledge spillovers, or profit maximization. That the most productive hospitals were those most likely to adopt new technology highlights the empirical pitfalls of estimating returns to new technologies based on instruments such as distance to hospitals.

Keywords:   medical technology, bare-metal stents, cardiologists, revascularization, drugeluting stents, new techonology, hospitals

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