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The Effect Of Hospital–Physician Integration On Health Information Technology Adoption

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  • Eric Lammers

Abstract

The US federal government has recently made a substantial investment to enhance the US health information technology (IT) infrastructure. Previous literature on the impact of IT on firm performance across multiple industries has emphasized the importance of a process of co‐invention whereby organizations develop complementary practices to achieve greater benefit from their IT investments. In health care, employment of physicians by hospitals can confer greater administrative control to hospitals over physicians' actions and resources and thus enable the implementation of new technology and initiatives aimed at maximizing benefit from use of the technology. In this study, I tested for the relationship between hospital employment of physicians and hospitals' propensity to use health IT. I used state laws that prohibit hospital employment of physicians as an instrument to account for the endogenous relationship with hospital IT use. Hospital employment of physicians is associated with significant increases in the probability of hospital health IT use. Therefore, subsidization of health IT among hospitals not employing physicians may be less efficient. Furthermore, state laws prohibiting hospitals from employing physicians may inhibit adoption of health IT, thus working against policy initiatives aimed at promoting use of the technology. Copyright © 2012 John Wiley & Sons, Ltd.

Suggested Citation

  • Eric Lammers, 2013. "The Effect Of Hospital–Physician Integration On Health Information Technology Adoption," Health Economics, John Wiley & Sons, Ltd., vol. 22(10), pages 1215-1229, October.
    • Handle: RePEc:wly:hlthec:v:22:y:2013:i:10:p:1215-1229
    DOI: 10.1002/hec.2878
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    References listed on IDEAS

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    Cited by:

    1. Maynou, L. & McGuire, A. & Serra-Sastre, V., 2019. "Exploring the Impact of New Medical Technology on Workforce Planning," Working Papers 19/07, Department of Economics, City University London.
    2. Richards, Michael R. & Seward, Jonathan A. & Whaley, Christopher M., 2022. "Treatment consolidation after vertical integration: Evidence from outpatient procedure markets," Journal of Health Economics, Elsevier, vol. 81(C).
    3. Maynou, Laia & Pearson, Georgia & McGuire, Alistair & Serra-Sastre, Victoria, 2022. "The diffusion of robotic surgery: Examining technology use in the English NHS," Health Policy, Elsevier, vol. 126(4), pages 325-336.
    4. Ian McCarthy & Sean Shenghsiu Huang, 2018. "Vertical Alignment Between Hospitals and Physicians as a Bargaining Response to Commercial Insurance Markets," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 53(1), pages 7-29, August.
    5. Na-Eun Cho & KiHoon Hong & Jongwha Chang, 2021. "Do Market Characteristics Matter? Factors Associated with Health Information Exchange," IJERPH, MDPI, vol. 18(22), pages 1-10, November.
    6. Lin, Haizhen & McCarthy, Ian M. & Richards, Michael, 2021. "Hospital Pricing Following Integration with Physician Practices," Journal of Health Economics, Elsevier, vol. 77(C).

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