Open AccessAre the returns to technological change in health care declining?
Author(s) -
Mark McClellan
Publication year - 1996
Publication title -
proceedings of the national academy of sciences of the united states of america
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 5.011
H-Index - 771
eISSN - 1091-6490
pISSN - 0027-8424
DOI - 10.1073/pnas.93.23.12701
Subject(s) - technological change , value (mathematics) , health care , emerging technologies , health technology , economics , cost–benefit analysis , marginal cost , business , actuarial science , economic growth , computer science , ecology , machine learning , artificial intelligence , biology , macroeconomics , microeconomics
Whether the U.S. health care system supports too much technological change—so that new technologies of low value are adopted, or worthwhile technologies become overused—is a controversial question. This paper analyzes the marginal value of technological change for elderly heart attack patients in 1984–1990. It estimates the additional benefits and costs of treatment by hospitals that are likely to adopt new technologies first or use them most intensively. If the overall value of the additional treatments is declining, then the benefits of treatment by such intensive hospitals relative to other hospitals should decline, and the additional costs of treatment by such hospitals should rise. To account for unmeasured changes in patient mix across hospitals that might bias the results, instrumental–variables methods are used to estimate the incremental mortality benefits and costs. The results do not support the view that the returns to technological change are declining. However, the incremental value of treatment by intensive hospitals is low throughout the study period, supporting the view that new technologies are overused.