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Working paper

Investigating Health Technology Diffusion in New Zealand - How Does it Spread and Who Stands to Gain? (WP 06/05)

Issue date: 
Saturday, 1 July 2006
Status: 
Current
View point: 
Document Date: 
Publication category: 
JEL classification: 
I11 - Analysis of Health Care Markets
O33 - Technological Change: Choices and Consequences; Diffusion Processes

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This paper explores how a new health technology diffuses across District Health Boards (DHBs), the price and coverage effects, and whether access is evenly spread across the population i.e. who benefits from a new device or procedure.

Abstract

Previous Treasury research has identified “price and coverage” effects as playing a key role in the growth of historical health expenditure. This incorporates factors such as technological change and input prices including wages. Bryant et. al. (2004) found that between 1950-51 and 2001-02, growth in price and coverage effects was the main source of long run growth in government health expenditure and has accounted for 3-4% growth per year since the early 1990s.

This paper explores how a new health technology diffuses across District Health Boards (DHBs), the price and coverage effects, and whether access is evenly spread across the population i.e. who benefits from a new device or procedure.

In particular, it highlights:

  • the variation in clinical practice between different DHBs
  • the degree to which the adoption of a particular technology in one DHB impacts on neighbouring DHBs:
    • a “domino” effect occurs when the adoption of a technology in one DHB leads to other DHBs following suit
    • the adoption of a technology in one DHB leads to increased inter-district flows between DHBs.
  • differences in access between geographical regions and also ethnic groups

The paper takes the example of a new procedure used in coronary care known as ‘stenting’ and examines its adoption across the different DHBs. Data used pertains to different heart procedures adopted across New Zealand over a particular time frame (1995-2004). It comprises patient details plus information relating to the DHB in which the procedure was carried out and also the patient’s domicile DHB.

Acknowledgements

The author gratefully acknowledges the comments from three external referees and also feedback from colleagues within Treasury.

Disclaimer

This document was commissioned by the New Zealand Treasury. However, the views, opinions, findings and conclusions or recommendations expressed in it are strictly those of the author(s), do not necessarily represent and should not be reported as those of the New Zealand Treasury. The New Zealand Treasury takes no responsibility for any errors, omissions in, or for the correctness of, the information contained in this Paper.

Last updated: 
Monday, 29 October 2007