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Technology Levels and Efficiency in Health Care
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In this paper a static model of technology choice by health care providers is presented. The model exhibits some stylized facts of technology adoption in the health care sector. We show that inefficiencies in technology adoption may result from intermediate technology providers. Technology improvements increase health care spending in a direct way - more costly techniques as new treatments are made available, and in an indirect way - increases of prices in all providers. This last channel seems to have been overlooked in the accounting of health care rising expenditures. It is also shown that coordination of providers' technology decisions, as performed by professional associations, may yield higher social welfare.
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Barros, Pedro Pita, Technology Levels and Efficiency in Health Care (December, 1995). FEUNL Working Paper Series No. 264