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