Economic Shocks and Healthcare Capital Investments

Michael R. Richards, Maggie Shi and Christopher Whaley

No 33487, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Information technology (IT) can enhance firms’ long-run performance but is a risky investment with uneven take-up. The drivers of and impediments to IT adoption are also not well-understood. We leverage the healthcare context to empirically examine hospitals’ IT investments following three distinct industry shocks. We find novel, consistent, and economically important responses. Recessions restrain investments while insurance expansions stimulate them. A hospital-specific and policy-driven financial shock also spurs IT adoption. The IT margin appears more sensitive to market conditions than other spending decisions. Supplementary analyses further suggest that perceptions of uncertainty about future revenue influence these specific capital investments.

JEL-codes: H42 I1 I11 I13 I18 L21 L23 L24 (search for similar items in EconPapers)
Date: 2025-02
New Economics Papers: this item is included in nep-hea, nep-ict and nep-ind
Note: EH
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