Health Care Management Papers

Document Type

Journal Article

Date of this Version

2013

Publication Source

The RAND Journal of Economics

Volume

44

Issue

3

Start Page

545

Last Page

568

DOI

10.1111/1756-2171.12030

Abstract

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.

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Date Posted: 27 November 2017

This document has been peer reviewed.