The cost of EHR adoption depends on whether a hospital has access to technical skills in its local labor market and internally, according to a new report from the National Bureau of Economic Research.
The authors, including researchers from Northwestern University's Kellogg School of Management, hypothesize that the impact of a new electronic health records system depends on whether the hospital has complementary assets that reduce the costs of adopting to the change and turning it into a net benefit.
The study of thousands of hospitals from 1996-2006 revealed that EHR adoption is initially associated with a rise in costs, but adoption in "favorable" conditions, such as an urban location with access to health IT, lowers costs. In areas with strong IT resources, costs can fall sharply after the first year of adoption to pre-adoption levels, according to the report.
"Overall, hospitals in IT-intensive markets enjoyed a statistically significant 3.4 percent decrease in costs from three years after adoption of basic EMR and a marginally significant 2.2 percent decrease in costs from three years after adoption of advanced EMR. These are significantly better than the up to 4 percent increase in costs after adoption by hospitals in other markets," the researchers noted.
They warn that if complementary assets are not available to the adopting hospital, that the results of EHR adoption will be "mixed."
These results dovetail with those in the recent report from the Government Accountability Office, which found that two-thirds of hospitals that have successfully attested to Meaningful Use were in urban areas.