The Formation of Peer Reputation Among Physicians and Its Effect on Technology Adoption

This paper studies patient volume and the severity of case mix as they relate to physicians’ human capital accumulation and pace of technology adoption by exploring a quality signaling mechanism through which physicians build peer reputation. We show that volume building leads physicians to actively manage case mix and find that successful surgeries (particularly for difficult cases) raise future volume, whereas failed surgeries (particularly for easy cases) deplete it. Surgeons with a high patient census and a low‐severity case mix adopt the new technology more rapidly. These findings highlight the role of peer reputation for growing practice size and the timing of technology adoption. Disciplines Health Services Research | Other Medicine and Health Sciences This journal article is available at ScholarlyCommons: http://repository.upenn.edu/hcmg_papers/123 289 [ Journal of Human Capital, 2009, vol. 3, no. 4] 2009 by The University of Chicago. All rights reserved. 1932-8575/2009/0304-0001$10.00 The Formation of Peer Reputation among Physicians and Its Effect on Technology Adoption Amol Navathe and Guy David University of Pennsylvania This paper studies patient volume and the severity of case mix as they relate to physicians’ human capital accumulation and pace of technology adoption by exploring a quality signaling mechanism through which physicians build peer reputation. We show that volume building leads physicians to actively manage case mix and find that successful surgeries (particularly for difficult cases) raise future volume, whereas failed surgeries (particularly for easy cases) deplete it. Surgeons with a high patient census and a low-severity case mix adopt the new technology more rapidly. These findings highlight the role of peer reputation for growing practice size and the timing of technology adoption.