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The effects of health information technology on the costs and quality of medical care

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  • Agha, Leila

Abstract

Information technology has been linked to productivity growth in a wide variety of sectors, and health information technology (HIT) is a leading example of an innovation with the potential to transform industry-wide productivity. This paper analyzes the impact of health information technology (HIT) on the quality and intensity of medical care. Using Medicare claims data from 1998 to 2005, I estimate the effects of early investment in HIT by exploiting variation in hospitals’ adoption statuses over time, analyzing 2.5 million inpatient admissions across 3900 hospitals. HIT is associated with a 1.3% increase in billed charges (p-value: 5.6%), and there is no evidence of cost savings even five years after adoption. Additionally, HIT adoption appears to have little impact on the quality of care, measured by patient mortality, adverse drug events, and readmission rates.

Suggested Citation

  • Agha, Leila, 2014. "The effects of health information technology on the costs and quality of medical care," Journal of Health Economics, Elsevier, vol. 34(C), pages 19-30.
    • Handle: RePEc:eee:jhecon:v:34:y:2014:i:c:p:19-30
    DOI: 10.1016/j.jhealeco.2013.12.005
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    References listed on IDEAS

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    More about this item

    Keywords

    I10; 033; Health information technology; Hospital productivity;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General

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