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.
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)