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Could managed care inhibit the spread of beneficial technologies? One case study-magnetic resonance imaging-provides some answers.
ABSTRACT: A growing body of evidence suggests that managed care can reduce overall health care costs but provides little insight into how this could happen. One possibility is that managed care influences the adoption of new medical technologies. In examining the relationship between health maintenance organization (HMO) activity and market-level availability and use of mag netic resonance imaging (MRI), we find that high HMO market share is associated with low levels of MRI availability and use. This suggests that managed care may be able to reduce health care costs by influencing the adoption and use of new medical equipment and technologies.
THERE IS GROWING EVIDENCE to support the view that managed care can reduce health care costs throughout the health care system, even costs generated outside of managed care plans.1 However, we are only beginning to understand how these cost reductions come about. One possibility that has not been full) explored is the potential for managed care to slow the systemwide adoption and diffusion of new medical technologies, which are believed to drive health care costs upward.2
In this DataWatch we investigate the possibility that managed care influences the availability of technology by changing the incentives associated with the purchase of new equipment and infra structure. This could occur through changes in demand for the (often costly) new services that can be provided with the lates equipment and reductions in the profitability of providing new serv ices brought about by managed care plans aggressive cost cutting By changing these or related incentives, managed care could alter decisions about the acquisition of new equipment and change the availability of new technologies. This in turn could influence both overall health care spending and patient care.
Previous literature provides reason to believe that managed care could influence new equipment adoption.3 Work on technology diffusion suggests that adoption responds to such economic variables as demand for related services and expected revenues, the regulatory environment, and competitive forces.4 Previous research that compares the use of new technologies by managed care patients and that of patients covered by other plans is less conclusive but may also suggest that managed care can affect the use...