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The impact of health information technology on hospital productivity
Author(s) -
Lee Jinhyung,
McCullough Jeffrey S.,
Town Robert J.
Publication year - 2013
Publication title -
the rand journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.687
H-Index - 108
eISSN - 1756-2171
pISSN - 0741-6261
DOI - 10.1111/1756-2171.12030
Subject(s) - competitor analysis , productivity , externality , production (economics) , investment (military) , marginal value , value (mathematics) , business , health care , function (biology) , economics , industrial organization , labour economics , microeconomics , marketing , economic growth , politics , political science , machine learning , evolutionary biology , computer science , law , biology
Health information technology (IT) has been championed as a tool that can transform health care delivery. We estimate the parameters of a value‐added hospital production function correcting for endogenous input choices to assess the private returns hospitals earn from health IT. Despite high marginal products, the total benefits from expanded IT adoption are modest. Over the span of our data, health IT inputs increased by more than 210% and contributed about 6% to the increase in value‐added. Not‐for‐profits invested more heavily and differently in IT. Finally, we find no compelling evidence of labor complementarities or network externalities from competitors' IT investment.