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Does Competition Lead to Agglomeration or Dispersion in EMR Vendor Decisions?

Author

Listed:
  • Seth Freedman

    (Indiana University)

  • Haizhen Lin

    (Indiana University)

  • Jeffrey Prince

    (Indiana University)

Abstract

We examine hospital Electronic Medical Record (EMR) vendor adoption patterns and how they relate to hospital market structure. As in many network technology adoption decisions, hospitals face countervailing incentives to coordinate or differentiate in their choice of vendors. We find evidence of substantial agglomeration on EMR vendors, which increases as hospital markets become more competitive. These findings suggest that incentives to coordinate dominate incentives to differentiate overall, and the relative balance grows stronger in favor of coordination as markets become more competitive. Our findings also have important implications regarding antitrust policy. A potential downside of hospital consolidation—increased obstacles in information sharing due to vendor differentiation—should be taken into account in evaluation of hospital mergers.

Suggested Citation

  • Seth Freedman & Haizhen Lin & Jeffrey Prince, 2018. "Does Competition Lead to Agglomeration or Dispersion in EMR Vendor Decisions?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 53(1), pages 57-79, August.
    • Handle: RePEc:kap:revind:v:53:y:2018:i:1:d:10.1007_s11151-018-9624-1
    DOI: 10.1007/s11151-018-9624-1
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    Cited by:

    1. Christopher M. Snyder & Victor J. Tremblay, 2018. "Introduction to the Special Issue on “The Intersection Between Industrial Organization and Healthcare Economics”," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 53(1), pages 1-6, August.

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    More about this item

    Keywords

    Competition; Health information technology; Network industries;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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