Does the proximity of IT firms influence the cost of EMR?

The National Bureau of Economic Research published a new paper (payment may be required) examining the “relationship between the adoption of electronic medical records (EMR) and hospital operating costs at thousands of US hospitals between 1996 and 2009.”

Here is an excerpt from the study’s abstract:

We find evidence consistent with this approach, namely, that: (1) EMR adoption is initially associated with a rise in costs; (2) EMR adoption at hospitals in favorable conditions – such as urban locations – leads to a decrease in costs after three years; and (3) Hospitals in unfavorable conditions experience a sharp increase in costs even after six years.

“Unfavorable conditions” include greater distance from information technology hubs, meaning that rural hospitals are less likely to see a short-term return on their EMR/EHR investment.

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