The Trillion Dollar Conundrum: Complementarities and Health Information Technology

David Dranove, Christopher Forman, Avi Goldfarb and Shane Greenstein

No 18281, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine the relationship between the adoption of EMR and hospital operating costs. We first identify a puzzle that has been seen in prior studies: Adoption of EMR is associated with a slight cost increase. We draw on the literature on IT and productivity to demonstrate that the average effect masks important differences across time, locations, and hospitals. We find: (1) EMR adoption is initially associated with higher costs; (2) At hospitals with access to complementary inputs, EMR adoption leads to a cost decrease after three years; (3) Hospitals in unfavorable conditions experience increased costs even after six years.

JEL-codes: I10 L30 (search for similar items in EconPapers)
Date: 2012-08
New Economics Papers: this item is included in nep-hea
Note: IO PR
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Citations: View citations in EconPapers (17)

Published as David Dranove & Chris Forman & Avi Goldfarb & Shane Greenstein, 2014. "The Trillion Dollar Conundrum: Complementarities and Health Information Technology," American Economic Journal: Economic Policy, American Economic Association, vol. 6(4), pages 239-70, November.

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