The Trillion Dollar Conundrum: Complementarities and Health Information Technology

David Dranove, Chris Forman, Avi Goldfarb and Shane Greenstein

American Economic Journal: Economic Policy, 2014, vol. 6, issue 4, 239-70

Abstract: We examine the heterogeneous relationship between the adoption of EMR and hospital operating costs at thousands of US hospitals between 1996 and 2009. We first document a previously-identified puzzle: Adoption of EMR is associated with a slight cost increase. Drawing on the literature on IT and productivity, we analyze why this average effect arises. We find that: (i) EMR adoption is initially associated with a rise in costs; (ii) EMR adoption at hospitals in IT-intensive locations leads to a decrease in costs after three years; and (iii) Hospitals in other locations experience an increase in costs even after six years.

JEL-codes: D24 I11 M15 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/pol.6.4.239
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Citations: View citations in EconPapers (37)

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Working Paper: The Trillion Dollar Conundrum: Complementarities and Health Information Technology (2012)
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