Week 12 Reading Summary (HK)

Atasoy, H., Chen, P., & Ganju, K. (2017). The spillover effects of health IT investments on regional healthcare costs. Management Science, forthcoming, 1-20.

Past research efforts have consistently demonstrated the quality benefits associated with the implementation of electronic health records (EHR), but research considering the cost on health care is more scarce and mixed. Atasoy, Chen, and Ganju (2017) shed light onto this research gap by considering the spillover effects of health IT investments on neighbouring healthcare providers’ costs. Moreover, Atasoy et al. (2017) approached this research from a macro-level perspective by considering how one hospital implementing an EHR system impacts the costs for them as well as for  surrounding hospitals. This approach is relevant as healthcare is often a community effort with hospitals sharing patients. Thus, any variable that decreases communication costs between hospitals, such as EHR systems, will lower the financial burden for all parties in the supply chain. In order to verify this proposition, data was collated from a variety of sources including the Healthcare Information Management Systems Society database for the longitudinal period from 1998 to 2012.

Analyses considering said dataset found that though EHR system adoption increases costs at the adopting hospital, it lowers costs at surrounding hospitals. Specifically, the spillover effect is stronger when an increasing number of hospitals in the region are in health information exchange networks and in the same integrated delivery systems since these networks and systems facilitate information exchange. Moreover, for hospitals with regional characteristics that facilitate patient sharing, such as urban vs rural areas, population density, average distance between hospitals, and hospital density, the spillover effect is more pronounced. Finally, the HITECH Act, which increased the adoption and use of EHR systems, catalyzed the spillover effects. Effectively, a macro-level investigation into EHR systems indicates that they can reduce costs for collaborating hospitals.