Does Bad News Travel Faster? On the Determinants of Medical Technology Abandonment

Abstract

This paper studies the abandonment of technology in reaction to information shocks. While the diffusion of new technologies has been widely researched, the factors driving abandonment are not well understood. This is particularly important in the health care sector, where curbing overuse of low-value technologies is a priority. Using the abandonment of pulmonary artery catheters (PACs) as an empirical application, we aim to understand patterns of human behavior when information that a technology is ineffective becomes available. This study focuses on the role of peer interaction in explaining medical technology abandonment. We find that surgeons alter their use of PACs in response to that of new surgeons who joined their hospitals directly from a fellowship in cardiothoracic surgery.