The Trillion Dollar Conundrum: Complementarities and Health Information Technology
AbstractWe examine the relationship between the adoption of EMR and hospital operating costs. We first identify a puzzle that has been seen in prior studies: Adoption of EMR is associated with a slight cost increase. We draw on the literature on IT and productivity to demonstrate that the average effect masks important differences across time, locations, and hospitals. We find: (1) EMR adoption is initially associated with higher costs; (2) At hospitals with access to complementary inputs, EMR adoption leads to a cost decrease after three years; (3) Hospitals in unfavorable conditions experience increased costs even after six years.
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Date of creation: Aug 2012
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- I10 - Health, Education, and Welfare - - Health - - - General
- L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General
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