The Impact of Health Information Technology on Demand for Inpatient Services

University Of Minnesota, Minneapolis MN

Investigators

Abstract

DESCRIPTION (provided by the applicant): The current health information technology (HIT) literature focuses on adoption rates and the effect of HIT on quality of care. The impact of HIT on the demand for health care services is an unexplored but important aspect of HIT. I evaluate the impact of HIT systems on the demand for hospital inpatient services by assessing changes in patient hospital choices related to hospital HIT adoption. I will calculate the magnitude of the impact that HIT systems have on a patient's hospital choice, and evaluate the economic implications of the changes in patients'hospital choices. The analysis employs numerous data sources including Medicare claims data, the American Hospital Association annual survey of hospitals, and the Healthcare Information and Management Systems Society (HIMSS) Analytics Database. Combing this data over multiple years will allow identification of the specific effect of HIT on patients'choices. The econometric method proposed for this project involves estimating the probability that a patient will choose a hospital using the patient's characteristics and observed hospital choice along with hospital characteristics and measures of hospital HIT. Two parts of the model will be help to identify the effect of HIT from other factors that may influence a patient's hospital choice. First, employing differences-in-differences I will exploit the differences in hospital adoption rates over time and across regions in order to isolate the changes in patient choices associated with HIT adoption. Second, hospital fixed effects will be included to control for unobservable, time invariant hospital specific characteristics will used a discrete choice model to estimate the probabilities of patients choosing each hospital in their choice set. The parameter estimates from these models will be used to calculate the impact that HIT has on patients'decisions and to simulate how patient decisions may change as HIT investment changes. This research makes two important contributions to the health services research literature and will be valuable for future health policy debates. First, the demand analysis complements the existing supply side analyses and allows for future estimates of the impact HIT on healthcare markets to be more complete and dynamic. Second, an understanding of the role of HIT on the market for healthcare will allow policy makers and the healthcare industry to make more informed decisions regarding optimal HIT adoption and implementation strategies. PUBLIC HEALTH RELEVANCE: This research project evaluates the impact that health information technology (HIT) systems at hospitals, such as electronic medical records, have on a patient's decision where to seek care. It is hypothesized that when deciding where to receive inpatient services a patient is more likely to choose a hospital with HIT systems than one without. Changes in patient demand have implications for future implementation of HIT, hospital utilization and hospital market power.