TECHNOLOGY DIFFUSION & ADOPTION

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Technology Diffusion

Technology diffusion is modeled as a “logistic” function in which the following

parameters define the shape of the curve.

% of volume Technology Diffusion

1.20000

Saturation
1.00000

0.80000

Accelerating diffusion
0.60000
"r" value - rate)

"50%" mark
0.40000

Development lag
0.20000

0.00000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Years

Saturation level: A given technology can impact on 100% of disease prevalence or DRG
utilization (where the saturation is “1”) or on a certain percentage of that
prevalence or utilization (where the saturation can be set to less than “1”)
“Take-off” point: The “take-off” point (or year at which 50% of relevant healthcare
facilities are using the technology) can be identified.
Development lag: Time related to development of the technology and regulatory
approval (as appropriate). For technologies just recently approved, this
development lag is “0”
Acceleration rate or “r”: Related to how rapidly the technology diffuses (reaches
saturation) once available. Pharmaceuticals (with low cost and low side-effects)
typically have a rapid (or large) acceleration rate, while surgical devices (high
expense and extensive training involved) would have a slow (small) acceleration
rate. This value can be predefined for most technologies.

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(847) 733-9080 1560 Sherman Avenue
www.sg-2.com Evanston, IL 60201
Technology Diffusion: noninvasive angiography example

This example forecasts the utilization of non-invasive coronary angiography (CTA and/or
MRA based). In the future, the vast majority of noninvasive angiographies will be
screening angiographies. Screening noninvasive angiographies will outnumber
diagnostic noninvasive angiographies by a factor of 10 and both will plateau by around
2009. We also see that invasive angiographies (even despite an increase in angioplasty
volumes) will decrease yet not be completely replaced by noninvasive angiography.

Projected coronary angiography volumes

U.S. Population, 2001 - 2010
Total Invasive Angiography
Total Noninvasive Angiography (Diagnostic & Screening)
Noninvasive (diagnostic) angiography
Noninvasive (screening) angiography

14,000,000

12,000,000

10,000,000
Volume

8,000,000

6,000,000

4,000,000

2,000,000

0
01

02

03

04

05

06

07

08

09

10
20

20

20

20

20

20

20

20

20

20

Year

Assumptions
Growth Rate
2001 (average annual)
Symptomatic CAD Population 12,282,452 2.0%
Baseline Population Data Total U.S. Population (35+) 142,946,000 2.1%
Total U.S. Population 281,000,000 0.9%

Total diagnostic angiography 1,165,003 Variable

Total endovascular procedures
(stents/angioplasty) 620,203 Variable
CAD current technology utilization
Total open procedures (CABG) 341,366 Variable
Total screening (exercise & thallium) "stress"
tests 9,394,000 2%

Year in which it is estimated that noninvasive

Noninvasive angiography
(timing and expected maximal utilization
parameters)
angiography begins to achieve widespread
adoption (e.g. at least 50% of all healthcare
facilities) 2005
Factor (between 0 and 1) indicating to what
extent noninvasive angiography (when the
technology is fully available) will be applied to
CAD screening. 0.8 1.00
Factor (between 0 and 1) indicating to what
extent noninvasive angiography (when the
technology is fully available) will be applied to
the symptomatic population undergoing non-
endovascular treatment. 1 1.00

Technology Diffusion & Adoption SG-2, LLC

(847) 733-9080 1560 Sherman Avenue
www.sg-2.com Evanston, IL 60201
Technology Adoption

Different institutions will fall on different portions of a given technology diffusion curve.
An institution’s adoption rate of each technology can be computed by comparing the
current (volume-adjusted) utilization of that technology at the institution relative to the
(volume-adjusted) national utilization rate for that technology.

In the example below, Institution #1 is a rapidly adopting institution with a volume-

adjusted utilization higher than the current (2002) utilization. Institution #2, on the other
hand, is a slower adopting institution with a utilization that is lower than the national
(volume-adjusted) utilization.

Technology Adoption

1.20000

1.00000

0.80000 Utilization at a
rapidly adopting
% of volume

institution #1
0.60000
Utilization at a
slowly adopting
institution #2
0.40000
Current average ∆U1: Difference between utilization at
national utilization rate institution #1 relative to
local volume adjusted national rate
0.20000

∆U2:

0.00000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Current time Years

Technology Diffusion & Adoption SG-2, LLC

(847) 733-9080 1560 Sherman Avenue
www.sg-2.com Evanston, IL 60201
Overall Technology Adoption Rating

A complete technology adoption rate for an entire institution (or a department/service

line) within an institution can thus be created which is simply the sum over all relevant
technologies of the “differences” (positive or negative) described above.

∑ ∆U
techi
i

% Adoption Rating
1.20000

Conservative
1.00000

0.80000
Accelerators

0.60000

"50%" mark
0.40000 Early Accelerators

0.20000
Initiators
0.00000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

The overall rating (relative to a national rating) can then be used to assign the institution
into one of four categories:

Initiators: Utilize technology typically in the first 10% of overall utilization

Early Accelerators: Are in the 10% to 50% group of first utilizers.

Accelerators: Are in the 50% to 90% group of utilizers.

Conservative: Are in the last 10% of utilizers

Technology Diffusion & Adoption SG-2, LLC

(847) 733-9080 1560 Sherman Avenue
www.sg-2.com Evanston, IL 60201