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Finance and Economics Discussion Series
Finance and Economics Discussion Series logo links to FEDS home page Health Care Finance and the Early Adoption of Hospital Information Systems
Ron Borzekowski

Abstract: This study examines the adoption of hospital information systems (HIS), specifically focusing on 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, this had changed: hospitals with the greatest incentives to lower costs were now more likely to adopt these technologies.

Keywords: Hospitals, information technololgy, medicare

Full paper (249 KB PDF)

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Last update: September 19, 2002