Decision, Operations and Information Technologies
Out with the Old, In with the New
Nov 28, 2017

Out with the Old, In with the New

Nov 28, 2017
Decision, Operations and Information Technologies
As Featured In 
Management Science

Knowing When to Upgrade Technology in Health Care

How do health care professionals decide when it’s time to ditch some innovation in medical technology in favor of the latest upgrade or advice from the medical community?

Researchers from the University of Maryland’s Robert H. Smith School of Business took a close look at how health care professionals abandoned their use of coronary stents, in response to either the emergence of a technology upgrade or in light of new information questioning the efficacy of the existing technology.

The study, “The When and Why of Abandonment,” by the University of Minnesota’s Brad N. Greenwood and the Smith School’s Ritu Agarwal, Rajshree Agarwal and Anandasivam Gopal, was published by the journal Management Science.

While there is a huge literature on adoption of new technologies, less is known about technology abandonment, the researchers said. This is not a trivial issue — if physicians and medical professionals do not keep up with what's state-of-the art in medical knowledge, the downside can be very severe. What drives some professionals to shift to new practices while others don’t is not clear, but it is highly likely that the workplace has some role in encouraging this shift. In this paper, the authors look at features of the hospital where physicians work to see if that influences how soon they abandon older practices for newer ones.

Their research examined coronary stents across three technological upgrades, with data that covered about two million Florida patients over a 12-year period, from 1995 to 2007.

They found striking differences in how quickly physicians in certain hospitals abandoned older technology in favor of a newer upgrade, based on whether the medical center was for-profit, not-for-profit or academic in nature.

Physicians in for-profit hospitals abandoned earlier generation stents in favor of newer stents faster than physicians in not-for-profit hospitals, thereby adopting newer and more expensive stents. But that difference was erased in cases when the efficacy of the technology was questioned.

Academic medical centers, meanwhile, demonstrated the highest rates of abandonment, regardless of the efficacy findings.

“Importantly,” the researchers explained, “we find that organizational factors dominate physician differences as explanatory factors for abandonment.”

Their research identifies which factors play into an organization’s decision to ditch older technology in favor of the new. And it underscores the importance of the organization’s mission in determining how readily it abandons obsolete technology.

Read more: The When and Why of Abandonment: The Role of Organizational Differences In Medical Technology Life Cycles is featured in Management Science.

About the Author(s)

Ritu Agarwal is the senior associate dean at the Robert H. Smith School of Business at the University of Maryland. She is also the Robert H. Smith Dean’s Chair of Information Systems and founding director of the school’s Center for Health Information and Decision Systems (CHIDS). She has published more than 100 papers in top academic journals, testified before government agencies such as the U.S. Department of Health, and collaborated with Fortune 500 companies such as Cisco Systems, Johnson and Johnson and Pfizer. Since arriving at Maryland Smith in 1999, Agarwal has taught at every level and received all of the school’s major teaching awards.

Rajshree Agarwal

Rajshree Agarwal is the Rudolph Lamone Professor of Entrepreneurship and Strategy and director of the Ed Snider Center for Enterprise and Markets at the University of Maryland. She studies the evolution of industries, firms and individual careers, as fostered by the twin engines of innovation and enterprise. Agarwal's scholarship uses an interdisciplinary lens to provide insights on strategic innovation for new venture creation and for firm renewal. She routinely publishes in leading journals in strategy and entrepreneurship. An author of more than 60 studies, her research has been cited more than 10,000 times, received numerous best paper awards, and funded by grants from various foundations, including the Kauffman Foundation, the Rockefeller Foundation and the National Science Foundation. She is currently the co-editor of the Strategic Management Journal and has previously served in co-editor and senior editor roles at Strategic Entrepreneurship Journal and Organization Science respectively.

Anand Gopal is a Professor and Van Munching Faculty Fellow at the Robert H. Smith School of Business, University of Maryland. His research interests are broadly in technology platforms, contracts and entrepreneurship. He has specific projects in technology-based entrepreneurship, secondary markets for tech products, mobile platforms and healthcare.

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