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

Author

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  • Seth Freedman

    (Indiana University, School of Public and Environmental Affairs, 1315 E. 10th St., Bloomington, IN 47405, USA)

  • Haizhen Lin

    (Indiana University, Kelley School of Business, 1309 E. 10th St., Bloomington, IN 47405, USA)

  • Jeff Prince

    (Indiana University, Kelley School of Business, 1309 E. 10th St., Bloomington, IN 47405, USA)

Abstract

We examine hospital Electronic Medical Record (EMR) vendor adoption patterns and how they relate to market structure. Hospitals have incentives to both coordinate with, and differentiate from, local competitors in their choice of vendors, with some of these incentives even linked to receipt of government subsidies through the HITECH Act of 2009. We find that hospitals tend to agglomerate in their vendor choices, and the level of agglomeration grows stronger with competition. 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. Hence, a potential downside of hospital competition, i.e., increased difficulty in information sharing due to increased incentive to differentiate, does not appear to materialize in this market.

Suggested Citation

  • Seth Freedman & Haizhen Lin & Jeff Prince, 2016. "Does Competition Lead to Agglomeration or Dispersion in EMR Vendor Decisions?," Working Papers 16-19, NET Institute.
    • Handle: RePEc:net:wpaper:1619
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    References listed on IDEAS

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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

    health information technology; network externalities; business stealing;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • 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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