Information and Communications Technology in Chronic Disease Care: Why is Adoption So Slow and Is Slower Better?
Unlike 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.
|Date of creation:||May 2007|
|Publication status:||published as doi: 10.1215/03616878-2009-034 Journal of Health Politics, Policy and Law 2009 Volume 34, Number 6: 1011-1034|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David J Brailer, 2005. "Economic Perspectives on Health Information Technology," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 40(3), pages 6-14, July.
- David, Paul A & Shurmer, Mark, 1996. "Formal standards-setting for global telecommunications and information services. Towards an institutional regime transformation?," Telecommunications Policy, Elsevier, vol. 20(10), pages 789-815, December.
- Shy,Oz, 2001.
"The Economics of Network Industries,"
Cambridge University Press, number 9780521805001, May.
- Joseph Farrell & Garth Saloner, 1985.
"Standardization, Compatibility, and Innovation,"
RAND Journal of Economics,
The RAND Corporation, vol. 16(1), pages 70-83, Spring.
- Daniel Hosken & John David Simpson, 2001. "Have Supermarket Mergers Raised Prices? An Event Study Analysis," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(3), pages 329-342.
- Michael L. Katz & Carl Shapiro, 1994. "Systems Competition and Network Effects," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 93-115, Spring.
- Evans, Dwight C. & Nichol, W. Paul & Perlin, Jonathan B., 2006. "Effect of the implementation of an enterprise-wide Electronic Health Record on productivity in the Veterans Health Administration," Health Economics, Policy and Law, Cambridge University Press, vol. 1(02), pages 163-169, April.
- Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-440, June.
- T Rice & R Labelle, 1989. "Do Physicians Induce Demand for Medical Service?," Centre for Health Economics and Policy Analysis Working Paper Series 18, Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada.
- Mark V. Pauly, 1974. "Overinsurance and Public Provision of Insurance: The Roles of Moral Hazard and Adverse Selection," The Quarterly Journal of Economics, Oxford University Press, vol. 88(1), pages 44-62.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:13078. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.