title: Investment subsidies and the adoption of electronic medical records in hospitals.
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.
authors.affiliation: Northwestern University Kellogg School of Management, Evanston, IL, United States. Electronic address: d-dranove@kellogg.northwestern.edu.
authors.forename: David
authors.initials: D
authors.lastname: Dranove
authors.affiliation: Northwestern University Kellogg School of Management, Evanston, IL, United States; NBER, Cambridge, MA, United States. Electronic address: c-garthwaite@kellogg.northwestern.edu.
authors.forename: Craig
authors.initials: C
authors.lastname: Garthwaite
authors.affiliation: Cornerstone Research, Menlo Park, CA, United States. Electronic address: bli@cornerstone.com.
authors.forename: Bingyang
authors.initials: B
authors.lastname: Li
authors.affiliation: Northwestern University Kellogg School of Management, Evanston, IL, United States. Electronic address: c-ody@kellogg.northwestern.edu.
authors.forename: Christopher
authors.initials: C
authors.lastname: Ody
mesh_terms: D057171:American Recovery and Reinvestment Act / Q000191:economics* / Q000706:statistics & numerical data; D003362:Cost-Benefit Analysis; D004469:Economics, Hospital / Q000331:legislation & jurisprudence / Q000706:statistics & numerical data; D057286:Electronic Health Records / Q000191:economics* / Q000331:legislation & jurisprudence / Q000706:statistics & numerical data; D006801:Humans; D007449:Investments / Q000191:economics / Q000331:legislation & jurisprudence; D008484:Medicaid / Q000191:economics* / Q000331:legislation & jurisprudence; D006278:Medicare / Q000191:economics* / Q000331:legislation & jurisprudence; D012052:Reimbursement, Incentive / Q000191:economics* / Q000331:legislation & jurisprudence; D013660:Taxes / Q000191:economics / Q000331:legislation & jurisprudence; D014481:United States
keywords: Electronic medical records; Hospitals; Investment subsidies