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Measuring the cost impact of hospital information systems: 1987-1994

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  • Borzekowski, Ron

Abstract

This study measures the impact of information technology (IT) use on hospital operating costs during the late 1980s and early 1990s. Using a proprietary eight-year panel dataset (1987-1994) that catalogues application-level automation for the complete census of the 3000 U.S. hospitals with more than 100 beds, this study finds that both financial/administrative and clinical IT systems at the most thoroughly automated hospitals are associated with declining costs three and five years after adoption. At the application level, declining costs are associated with the adoption of some of the newest technologies, including systems designed for cost management, the administration of managed care contracts, and for both financial and clinical decision support. The association of cost declines with lagged IT as well as the cost patterns at the less automated hospitals both provide some evidence of learning effects.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 28 (2009)
Issue (Month): 5 (September)
Pages: 938-949

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Handle: RePEc:eee:jhecon:v:28:y:2009:i:5:p:938-949

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Web page: http://www.elsevier.com/locate/inca/505560

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Keywords: Information systems Cost Productivity Hospitals;

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References

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  1. Jeffrey S. McCullough, 2008. "The adoption of hospital information systems," Health Economics, John Wiley & Sons, Ltd., vol. 17(5), pages 649-664.
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  8. Kessler, Daniel & McClellan, Mark, 1996. "Do Doctors Practice Defensive Medicine?," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 353-90, May.
  9. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 1999. "Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-Level Evidence," NBER Working Papers 7136, National Bureau of Economic Research, Inc.
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Cited by:
  1. Natalia Zhivan & Mark Diana, 2012. "U.S. hospital efficiency and adoption of health information technology," Health Care Management Science, Springer, vol. 15(1), pages 37-47, March.
  2. Felix Köbler & Jens Fähling & Helmut Krcmar & Jan Leimeister, 2010. "IT Governance and Types of IT Decision Makers in German Hospitals," Business & Information Systems Engineering, Springer, vol. 2(6), pages 359-370, December.
  3. Jeffrey S. McCullough & Stephen Parente & Robert Town, 2013. "Health Information Technology and Patient Outcomes: The Role of Organizational and Informational Complementarities," NBER Working Papers 18684, National Bureau of Economic Research, Inc.
  4. David Dranove & Christopher Forman & Avi Goldfarb & Shane Greenstein, 2012. "The Trillion Dollar Conundrum: Complementarities and Health Information Technology," NBER Working Papers 18281, National Bureau of Economic Research, Inc.
  5. Jinhyung Lee & Jeffrey S. McCullough & Robert J. Town, 2012. "The Impact of Health Information Technology on Hospital Productivity," NBER Working Papers 18025, National Bureau of Economic Research, Inc.

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