Saturday, June 2, 2007 * 3:00 p.m.-6:00 p.m.
Walt Disney World Swan and Dolphin * Orlando
Oceanic 5

Adoption of Clinical IT in US Hospitals: Organizational and Market Factors

Katya Fonkych, Ph.D.
Post-doctoral Fellow
University of Southern California
Health Policy
1951 22nd St, Apt. 5
Santa Monica, CA 90404
PH: (310) 460-8673
Email: fonkych@rand.org

Research Objective:

This study seeks to investigate the characteristics of hospitals and hospital systems that affect their propensity to adopt clinical information technologies, such as inpatient EMR, CPOE and PACS systems. The analysis focuses on the role of provider characteristics and market factors, such as structure of hospital system, capitation and competition in the process of health IT adoption.

Study Design:

The paper includes a theoretical framework that describes hospital's motivations to upgrade their clinical IT system, and links those motivations and barriers to the provider characteristics. The unique feature of this study is that its major dependent variable represents an overall level of clinical IT system sophistication, as it is constructed from adoption pattern of many inter-related clinical IT applications. A multivariate cross-sectional regression analysis is employed to estinate marihnal effects of organizational and market factors responsible for adoption behavior by means of logit, OLS and ordered logit regressions.

Population:

The unit of analysis is a non-federal acute-care hospital in the US and a hospital system that this hospital belongs to. The data on clinial adoption in 2004 come from the survey of health IT adoption in US hospitals and hospital systems from Healthcare Information and Management Systems Society (HIMSS) database. The sample covers those hospitals that are larger than 100 beds or belong to a multi-hospital system.

Findings:

Depending on the interest of the panel organizers, my presentation could emphasize any subset of the following empirical findings:

1) Hospitals that care for larger fraction of Medicare, Medicaid or indigent patients are less likely to adopt clinical HIT systems.

2) Capitation payment method has positive effect on EMR adoption, as it best allows hospitals to appropriate the benefits of efficiency improvement due to HIT.

3) Competition has positive effect on adoption of some clinical HIT systems but not the others.

4) Network externalities may allow local multi-provider organizations to enjoy benefits from organized exchange of clinical information. Local multi-hospital systems are more likely to adopt EMR than either independent hospitals or geographically dispersed systems. Similarly, hospitals linked to local ambulatory offices from the same maternal system are more likely to acquire EMR system.

Conclusion:

Adoption of clinical IT is governed by a complex set of organizational and market factors, which in addition to hospital size and profit status include its payer mix, reimbursement methods, market structure and network externalities. The conclusions call for greater CMS involvement and reimbursement models that would reward higher quality and efficiency achieved through clinical health information technology.

Implications:

The study identifies the areas where public policies are most necessary and suggest incentives and strategies to stimulate HIT adoption by healthcare providers. The empirical results are useful to understand market incentives and to suggest policies that could be considered to stimulate adoption, and identify groups of providers that are potential targets for such policies.