Hospital Information Technology Adoption and Market Structure
Posted: 16 Jun 2007
Abstract: In this paper, we estimate a model of information technology (IT) adoption in the hospital industry. Our model allows the returns to adoption to vary according to market conditions as well as hospital and technology characteristics. Key IT characteristics include the systemic versus autonomous nature of the technology, i.e., whether they require cooperation from adjacent parts of the industry value chain for successful implementation. In addition, we distinguish among technologies that lowers costs or affect demand through product differentiation. Hospitals' ability to implement these technologies likely varies with firm-specific factors, such as size, common ownership of multiple hospitals, or vertical integration with physicians. Because economic theory generates ambiguous predictions about the impact of firm and market structure on technology adoption, we examine these relationships empirically.
Keywords: hospital competition, quality, information technology
JEL Classification: I11, L41
Suggested Citation: Suggested Citation