TY  - JOUR
AU  - Cutler,David M.
AU  - Huckman,Robert S.
TI  - Technological Development and Medical Productivity: The Diffusion of Angioplasty in New York State
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9311
PY  - 2002
Y2  - November 2002
UR  - http://www.nber.org/papers/w9311
L1  - http://www.nber.org/papers/w9311.pdf
N1  - Author contact info:
David M. Cutler
Department of Economics
Harvard University
1875 Cambridge Street
Cambridge, MA  02138
Tel: 617/496-5216
Fax: 617/496-8951
E-Mail: dcutler@harvard.edu

Robert Huckman
435 Morgan Hall
Harvard Business School
Boston, MA  02163
Tel: 617/495-6649
E-Mail: rhuckman@hbs.edu
AB  - A puzzling feature of many medical innovations is that they simultaneously appear to reduce unit costs and increase total costs. We consider this phenomenon by examining the diffusion of percutaneous transluminal coronary angioplasty (PTCA) -- a treatment for coronary artery disease -- over the past two decades. We find that growth in the use of PTCA led to higher total costs despite its lower unit cost. Over the two decades following PTCA's introduction, however, we find that the magnitude of this increase was reduced by between 10% and 20% due to the substitution of PTCA for CABG. In addition, the increased use of PTCA appears to be a productivity improvement. PTCAs that substitute for CABG cost less and have the same or better outcomes, while PTCAs that replace medical management appear to improve health by enough to justify the cost.
ER  -