Externalities in Hospitals and Physician Adoption of a New Surgical Technology

An Exploratory Analysis

Published in: Journal of Health Economics, v. 15, no. 6, Dec. 1996, p. 715-734

Posted on RAND.org on January 01, 1996

by Jose J. Escarce

Much recent work on the economics of new technology adoption has investigated the roles of information and externalities. However, studies of technology adoption by physicians have not addressed these issues. This paper examines the adoption by general surgeons of laparoscopic cholecystectomy, a new surgical procedure which was introduced in 1989. The paper addresses the informational and cost externalities which may be generated when the first surgeon in a hospital adopts a new procedure. The findings suggest that access to information about laparoscopic cholecystectomy influenced surgeons' adoption behavior, and that externalities in hospitals may have hastened the diffusion of the procedure.

This report is part of the RAND Corporation External publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.