Prospective reimbursement and the diffusion of new technologies in hospitals.

This paper presents new evidence on the effects of prospective hospital reimbursement on the diffusion of new medical technologies in American hospitals. The probability, speed, and extent of adoption of five specific new technologies in six states, three with prospective reimbursement and three without, are examined using the results of a hospital survey conducted by the American Hospital Association for this study in 1980. The analysis demonstrates the influence of prospective reimbursement on the diffusion of new technologies. It is clear as well that these effects depend upon the specific attributes of the prospective reimbursement program and the characteristics of the technologies themselves.