MIS 9003 – Prof. Min-Seok Pang

Adjerid et al 2016 — Siddharth Bhattacharya

The paper talks about the interesting debate between privacy regulations and HIE incentives.On one hand,patient consent requirements add administrative costs and restrict the availability  of patient information.On the other a system that assumed their willingness to participate without obtaining explicit consent (i.e., an opt-out system) would not be acceptable.Thus, policy makers seeking
to foster the growth of HIE efforts face the same challenge that emerges in other industries: how to address privacy concerns without over-regulating the disclosure of personal information and stifling the growth and emergence of valuable information technology efforts reliant on it.Thus the authors want to explore  whether different forms of privacy regulation enable or impede HIE efforts.They posit that incentives could offset the significant costs associated with HIE efforts, including those that arise from varying degrees of privacy regulation.Using semiannual data from a six-year period (2004–
2009)the authors use an empirical strategy taking advantage of the fact that across different states policy makers have approached HIE challenges in different ways, enacting legislation that varied both in terms of the incentives they create for HIEs, and in terms of the types of privacy protections they afford to patient data exchanged through HIEs. The empirical investigation includes a fixed effect model(the main analysis) followed by a cross sectional model to look at underlying factors and also ruling out confounding explanations.The authors also do a series of robustness checks to rule out any endogeniety concerns.Although results show that privacy regulation without incentives had a negative effect on HIE efforts, we also find that privacy regulation, particularly regulation that includes consent requirements, was a necessary condition for incentives to positively impact HIE efforts. Incentives coupled with privacy regulation that included requirements for patient consent resulted in a 47% increase in the propensity of an HRR having a planning HIE and a 23% increase in the propensity of an HRR having an operational HIE.By contrast incentives without any privacy regulations/with privacy regualtions but which didn’t have any consent requirements resulted in little/no gain.The results contribute to literature in adoption and the diffusion of IT in healthcare—in particular, the factors and barriers that impact their adoption and is one of the first studies to examine the impact on the emergence of planning and operational HIEs of varying approaches to privacy regulation.It also contributes to the economic and policy literature evaluating the impact of privacy protections on technological progress by showing that HIE incentives consistently
offset the negative baseline effects of privacy regulation on HIEs and, more surprisingly, that incentives
were more effective in doing so when coupled with privacy regulation that included consent requirements.

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