The Last Mile Failure in Medical Innovation Diffusion: Market Failures, Trust Deficits, and Institutional Barriers

Hong Liu

doi:10.54691/qwtyf947

Authors

Hong Liu United World College Changshu China, Suzhou 215500, China

DOI:

https://doi.org/10.54691/qwtyf947

Keywords:

Medical Innovation, Diffusion Barriers, Market Failure, Trust Deficit, Institutional Barriers, Bass Model.

Abstract

The last mile failure is often seen when it comes to medical innovations from the point where they are approved by regulators to when they are actually being used in practice. This study introduces a barrier constrained diffusion model that formally explores three types of barriers to adoption in the final stage: market failures due to information asymmetry and externalities; trust barriers between patients and providers of care; institutional barriers arising from fragmented regulatory and reimbursement policies. We change the Bass diffusion framework by adding barrier attenuation functions of each kind of obstacle. The cross-national data pertaining to 28 medical technologies in 15 countries for the period 2005-2022 are calibrated. Simulation results show that about 38 per cent of the diffusion delay is because of institutional barriers, 34 per cent is due to the trust deficit and 28 per cent is due to the market failures. Integrated interventions that help achieve 80 percent adoption in the median time reduced all three barrier dimensions, compared to interventions that address only one dimension of the barriers, which increased the median time by 5.7 years. This provides a quantitative base for creating effective policies to speed up the process of moving approved medical innovations into patients' hands.

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