Investment subsidies and the adoption of electronic medical records in hospitals

David Dranove, Craig Garthwaite*, Bingyang Li, Christopher Ody

*Corresponding author for this work

Research output: Contribution to journalArticle

20 Scopus citations

Abstract

In February 2009 the U.S. Congress unexpectedly passed the Health Information Technology for Economic and Clinical Health Act (HITECH). HITECH provides up to $27 billion to promote adoption and appropriate use of Electronic Medical Records (EMR) by hospitals. We measure the extent to which HITECH incentive payments spurred EMR adoption by independent hospitals. Adoption rates for all independent hospitals grew from 48 percent in 2008 to 77 percent by 2011. Absent HITECH incentives, we estimate that the adoption rate would have instead been 67 percent in 2011. When we consider that HITECH funds were available for all hospitals and not just marginal adopters, we estimate that the cost of generating an additional adoption was $48 million. We also estimate that in the absence of HITECH incentives, the 77 percent adoption rate would have been realized by 2013, just 2 years after the date achieved due to HITECH.

Original languageEnglish (US)
Pages (from-to)309-319
Number of pages11
JournalJournal of Health Economics
Volume44
DOIs
StatePublished - Dec 1 2015

Keywords

  • Electronic medical records
  • Hospitals
  • Investment subsidies

ASJC Scopus subject areas

  • Health Policy
  • Public Health, Environmental and Occupational Health

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