Technology Diffusion and Productivity Growth in Health Care

We draw on macroeconomic models of diffusion and productivity to explain empirical patterns of survival gains in heart attacks. Using Medicare data for 2.8 million patients from 1986 to 2004, we find that hospitals rapidly adopting cost-effective innovations such as beta blockers, aspirin, and reperfusion had substantially better outcomes for their patients. Holding technology adoption constant, the marginal returns to spending were relatively...