The adoption and cost impact of hospital information systems

This thesis examines the economics of hospital information systems (HIS), computers and other equipment used in the administration of the hospital as well as the provision of patient care. Using two new datasets and application-based measures of information technology use within the firm, the studies examine the adoption and cost impacts of these systems.; The first study focuses on the adoption of hospital information systems, specifically examining the connection between the financing of health care and the adoption of these new technologies. Using a recently uncovered dataset detailing the systems installed at over 2300 hospitals, the results indicate that state price regulations slowed the adoption of these systems during the 1970's. In contrast, hospitals increased their adoption of HIS in response to the implementation of Medicare's prospective payment system. The evidence suggests that in the early years, these systems did not have the ability to save sufficient funds to justify their expense and adopters, in particular not-for-profit hospitals, were motivated by factors other than cost. By the early 1980's the relative costs and benefits of HIS, along with the incentives to adopt, had shifted.; The second study seeks to measure the impact of information technology use on hospital operating costs during the late 1980's and early 1990's. The foundation for the work is a proprietary eight-year panel dataset (1987–1994) that catalogues the specific degree of automation at the application level for the complete census of the 3,000 U.S. hospitals with more than 100 beds. In the results, adoption of both financial/administrative and clinical IT systems at the most thoroughly automated hospitals is found to be associated with declining costs. At the application level, declining costs are also associated with the adoption of some of the newest technologies, including systems designed for cost management, the administration of managed care contracts, and for both financial and clinical decision support. These relationships increase in the three to five years following adoption providing evidence of learning effects.