In the context of rising health expenditures it is relevant to consider the behavior of those who, in large part, determine what medical procedures are performed on patients. The purpose of this paper is to describe the utilization of diagnostic tests of the colon in Australia. The study is restricted to private medical practitioners operating on a fee-for-service basis. Diagnosis of the gastrointestinal tract is of some interest because the new technology of fiber optic endoscopy has provided an alternative means of diagnosing diseases or conditions. The results presented here indicate rising per capita utilization rates for both the “new” technology and the “old” techniques of barium enema radiology and sigmoidoscopy. There is no evidence of the “new” technology displacing the “old” in terms of per capita use. The data may be consistent with the hypothesis that process innovations in medicine do not displace alternative products: rather they are “added on” to the existing products.
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