Does EMR Adoption by Nursing Homes Decrease Hospitalization Costs?

38 Pages Posted: 12 Jan 2021 Last revised: 5 May 2021

See all articles by Atiye Cansu Erol

Atiye Cansu Erol

University of Pennsylvania, The Wharton School

Lorin M. Hitt

University of Pennsylvania - Operations & Information Management Department

Prasanna Tambe

Wharton School, U. Pennsylvania

Date Written: June 1, 2020

Abstract

Electronic Medical Records (EMR) have the potential to decrease medical expenditures by
increasing communication between healthcare providers and reducing the incidence of unnecessary tests and medical errors. Using a three-year panel of out-of-home Medicaid spending for long-term care patients in nursing homes, we analyze the effect of nursing home EMR adoption on out-of-home healthcare expenditures for their residents. First, we find evidence that EMR adoption by nursing homes reduces out-of-home healthcare costs for residents by 3.5%-14%. Second, beyond this direct effect, we find a further reduction of hospitalization costs for residents when hospitals and nursing homes both adopt EMR, which is an average savings of 13% of Medicaid expenditure and as much as 35% for hospitals that are part of a system. Given the interdependent nature of healthcare delivery for long-term care patients or patients with chronic conditions, our findings underscore the importance of looking outside the adopting institution when accounting for health IT (HIT) value.

Keywords: EMR, EHR, Electronic Medical Records, Health IT, HIT, Complementarities

Suggested Citation

Erol, Atiye Cansu and Hitt, Lorin M. and Tambe, Prasanna, Does EMR Adoption by Nursing Homes Decrease Hospitalization Costs? (June 1, 2020). Available at SSRN: https://ssrn.com/abstract=3725715 or http://dx.doi.org/10.2139/ssrn.3725715

Atiye Cansu Erol (Contact Author)

University of Pennsylvania, The Wharton School ( email )

Philadelphia, PA 19104
United States

Lorin M. Hitt

University of Pennsylvania - Operations & Information Management Department ( email )

571 Jon M. Huntsman Hall
Philadelphia, PA 19104
United States
215-898-7730 (Phone)
215-898-3664 (Fax)

Prasanna Tambe

Wharton School, U. Pennsylvania ( email )

Philadelphia, PA 19104
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
49
Abstract Views
228
PlumX Metrics