More Bad News for Health IT

Despite high marginal products, the potential benefits from expanded IT adoption are modest. Over the span of our data, health IT inputs increased by more than 210% and contributed about 6% to the increase in value-added. Virtually all the increase in value-added is attributable to the increased use of inputs – there was little change in hospital multi-factor productivity. Not-for-profits invested more heavily and differently in IT than for-profit hospitals. Finally, we find no evidence of labor complementarities or network externalities from health IT.

Full NBER study by Jinhyung Lee, Jeffery S. McCullough and Robert J. Town.

Comments (3)

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  1. mdb says:

    Most encounters with healthcare are limited to distinct issues that are resolved in less than 3 months. I don’t know the statistics but I would guess that would be a high % of all the cases (counting all interactions people have with health care providers). IT will provide little for these people, there is really no need detailed history going back years – the cost benefit ratio would approach infinity. Next up would be chronic conditions managed with drugs (CVS and Walgreens have invested heavily in IT for this group), beyond drug management this group would not really benefit from IT. The population that would benefit are the high cost cases that have lots of information and require detailed histories in order to make decisions. a small percent of total cases but a large percent of total cost. Their model only addresses totals and I don’t think it includes IT spending by pharmacies that should be included. I don;t necessarily agree disagree with their conclusions in general – but their methods are blunt and not a very good basis for discussion.

  2. Devon Herrick says:

    I believe health information technology (IT) has the potential to revolutionize the treatment of diseases and conditions. However, a top-down approach will likely not yield positive results. To really make a different, health IT would need to track patients’ metrics over time and glean information from millions of observations over the course of decades. Health care providers would also need to compete on price and quality before they will be willing to use health IT to reduce unnecessary expenditure.

  3. Bruce says:

    No surprise here.