"The Effects of Health Information Technology on Costs and Quality of Medical Care" (Job Market Paper) [Download PDF]
Information technology has been linked to productivity growth in a wide variety of sectors, and health information technology (HIT) is a leading example of an innovation with the potential to transform industrywide productivity. This paper analyzes the impact of HIT on the quality and intensity of care delivered to Medicare inpatients. Building an organizational model, I show how the adoption of HIT may improve patient health and may either increase or decrease medical expenditures. Using Medicare claims data from 1998-2005, I estimate the effects of HIT by exploiting variation in hospitals’ adoption statuses over time, analyzing 2.5 million inpatient admissions across 3900 hospitals. HIT is associated with an initial 1.3% increase in billed charges, and there is no evidence of cost savings, even five years after adoption. Additionally, HIT adoption appears to have little impact on the quality of care, measured by patient mortality, medical complication rates, adverse drug events, and readmission rates. These results are robust to the addition of rich controls for pre-trends. The findings suggest that HIT is not associated with improvements in either the efficiency or quality of hospital care for Medicare patients, through five years after adoption.
"Technology Diffusion in Medicare: Financial Incentives and Physician Learning"
New medical technologies are thought to be a primary driver of rising medical costs as well as improved health outcomes and longevity. Understanding which factors predict and encourage efficient adoption of new diagnostic and therapeutic technologies could inform policies that facilitate appropriate use of new technologies while minimizing costs. In this paper, I exploit regional variation in Medicare reimbursement policy for nascent technologies to analyze how financial incentives affect the speed and persistence of technology diffusion. I also analyze to what extent physicians learn about the efficacy and applicability of a new technology from peers at other hospitals. This research will test whether early-adopting regions undertake costly experimentation on new medical technologies, where the returns are uncertain and low on average, thus subsidizing the learning process for late-adopting regions.