Information and Communications Technology in Chronic Disease Care: Why is Adoption So Slow and Is Slower Better?
AbstractUnlike the widespread adoption of information and communications technology (ICT) in much of the economy, adoption of ICT in clinical care is limited. We examine how a number of not previously emphasized features of the health care and ICT markets interact and exacerbate each other to create barriers for adoption. We also examine how standards can address these barriers and the key issues to consider before investing in ICT. We conclude that the ICT market exhibits a number of unique features that may delay or completely prevent adoption, including low product differentiation, high switching costs, and lack of technical compatibility. These barriers are compounded by the many interlinked markets in health care, which substantially blunt the use of market forces to influence adoption. Patient heterogeneity also exacerbates the barriers by wide variation in needs and ability for using ICT, by high demands for interoperability, and by higher replacement costs. Technical standards are critical for ensuring optimal use of the technology. Careful consideration of the socially optimal time to invest is needed. The value of waiting in health care is likely to be so much greater than in other sectors because the costs of adopting the wrong type of ICT are so much higher.
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Date of creation: May 2007
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Find related papers by JEL classification:
- I1 - Health, Education, and Welfare - - Health
- I10 - Health, Education, and Welfare - - Health - - - General
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-05-12 (All new papers)
- NEP-HEA-2007-05-12 (Health Economics)
- NEP-ICT-2007-05-12 (Information & Communication Technologies)
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