Working Paper: NBER ID: w13078
Authors: Michael C. Christensen; Dahlia Remler
Abstract: Unlike the widespread adoption of information and communications technology (ICT) in much of the economy, adoption of ICT in clinical care is limited. We examine how a number of not previously emphasized features of the health care and ICT markets interact and exacerbate each other to create barriers for adoption. We also examine how standards can address these barriers and the key issues to consider before investing in ICT. We conclude that the ICT market exhibits a number of unique features that may delay or completely prevent adoption, including low product differentiation, high switching costs, and lack of technical compatibility. These barriers are compounded by the many interlinked markets in health care, which substantially blunt the use of market forces to influence adoption. Patient heterogeneity also exacerbates the barriers by wide variation in needs and ability for using ICT, by high demands for interoperability, and by higher replacement costs. Technical standards are critical for ensuring optimal use of the technology. Careful consideration of the socially optimal time to invest is needed. The value of waiting in health care is likely to be so much greater than in other sectors because the costs of adopting the wrong type of ICT are so much higher.
Keywords: No keywords provided
JEL Codes: I10; I11; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Unique features of the ICT market (L86) | barriers to ICT adoption in health care (I11) |
| Low product differentiation (L15) | barriers to ICT adoption in health care (I11) |
| High switching costs (L15) | barriers to ICT adoption in health care (I11) |
| Lack of technical compatibility (L15) | barriers to ICT adoption in health care (I11) |
| Interlinked markets in health care (I11) | barriers to ICT adoption in health care (I11) |
| Patient heterogeneity (I11) | barriers to ICT adoption in health care (I11) |
| Lack of demonstrated cost-effectiveness of ICT (L86) | insurers' reluctance to reimburse for these technologies (I13) |
| Insurers' reluctance to reimburse for these technologies (I13) | barriers to ICT adoption in health care (I11) |