The Impact of Privacy Regulation on Technology Adoption: The Case of Health Information Exchanges

Management Science, 62(4), 1042--1063, 2015

23 Pages Posted: 6 Jan 2019 Last revised: 13 Jul 2020

See all articles by Idris Adjerid

Idris Adjerid

Pamplin College of Business

Alessandro Acquisti

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Rema Padman

School of Information Systems and Management, The H. John Heinz III College

Rahul Telang

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Julia Adler-Milstein

Harvard University - Technology & Operations Management Unit; Harvard University - Health Policy

Date Written: 2015

Abstract

Health information exchanges (HIEs) are healthcare information technology efforts designed to foster coordination of patient care across the fragmented U.S. healthcare system. Their purpose is to improve efficiency and quality of care through enhanced sharing of patient data. Across the United States, numerous states have enacted laws that provide various forms of incentives for HIEs and address growing privacy concerns associated with the sharing of patient data. We investigate the impact on the emergence of HIEs of state laws that incentivize HIE efforts and state laws that include different types of privacy requirements for sharing healthcare data, focusing on the impact of laws that include requirements for patient consent. Although we observe that privacy regulation alone can result in a decrease in planning and operational HIEs, we also find that, when coupled with incentives, privacy regulation with requirements for patient consent can actually positively impact the development of HIE efforts. Among all states with laws creating HIE incentives, only states that combined incentives with consent requirements saw a net increase in operational HIEs; HIEs in those states also reported decreased levels of privacy concern relative to HIEs in states with other legislative approaches. Our results contribute to the burgeoning literature on health information technology and the debate on the impact of privacy regulation on technology innovation. In particular, they show that the impact of privacy regulation on the success of information technology efforts is heterogeneous: both positive and negative effects can arise from regulation, depending on the specific attributes of privacy laws.

Keywords: privacy, information systems, IT policy and management, economics of information systems, healthcare

Suggested Citation

Adjerid, Idris and Acquisti, Alessandro and Padman, Rema and Telang, Rahul and Adler-Milstein, Julia, The Impact of Privacy Regulation on Technology Adoption: The Case of Health Information Exchanges (2015). Management Science, 62(4), 1042--1063, 2015, Available at SSRN: https://ssrn.com/abstract=3305279

Idris Adjerid

Pamplin College of Business ( email )

2058 Pamplin College of Business
Blacksburg, VA 20461
United States

Alessandro Acquisti (Contact Author)

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States
412-268-9853 (Phone)
412-268-5339 (Fax)

Rema Padman

School of Information Systems and Management, The H. John Heinz III College ( email )

Pittsburgh, PA 15213-3890
United States

Rahul Telang

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

4800 Forbes Ave
Pittsburgh, PA 15213-3890
United States
412-268-1155 (Phone)

Julia Adler-Milstein

Harvard University - Technology & Operations Management Unit ( email )

Boston, MA 02163
United States

Harvard University - Health Policy ( email )

14 Story Street
4th Floor
Cambridge, MA 02138
United States

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