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Privacy Protection and Technology Diffusion: The Case of Electronic Medical Records

Author

Listed:
  • Amalia R. Miller

    () (Department of Economics, University of Virginia, Charlottesville, Virginia 22904)

  • Catherine Tucker

    () (MIT Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02142)

Abstract

This paper quantifies the effect of state privacy regulation on the diffusion of electronic medical records (EMRs). EMRs allow medical providers to store and exchange patient information using computers rather than paper records. Hospitals may be more likely to adopt EMRs if they can reassure patients that their confidentiality is legally protected. Alternatively, privacy protection may inhibit adoption if hospitals cannot benefit from easily exchanging patient information. We find that state privacy regulation restricting hospital release of health information reduces aggregate EMR adoption by hospitals by more than 24%. We present evidence that suggests that this is due to the suppression of network externalities.

Suggested Citation

  • Amalia R. Miller & Catherine Tucker, 2009. "Privacy Protection and Technology Diffusion: The Case of Electronic Medical Records," Management Science, INFORMS, vol. 55(7), pages 1077-1093, July.
  • Handle: RePEc:inm:ormnsc:v:55:y:2009:i:7:p:1077-1093
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    File URL: http://dx.doi.org/10.1287/mnsc.1090.1014
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    References listed on IDEAS

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    More about this item

    Keywords

    technology; privacy protection; health IT; network externalities; network effects; hospitals;

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • K2 - Law and Economics - - Regulation and Business Law
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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