Health Information Technology and Patient Outcomes: The Role of Organizational and Informational Complementarities

Health information technology (IT) adoption, it is argued, will dramatically improve patient care. We study the impact of hospital IT adoption on patient outcomes focusing on the roles of technological and organizational complements in affecting IT's value and explore underlying mechanisms through which IT facilitates the coordination of labor inputs. We link detailed hospital discharge data on all Medicare fee-for-service admissions from 2002-2007 to detailed hospital-level IT adoption information. We employ a difference-in-differences strategy to identify the parameters of interest. For all IT sensitive conditions we find that health IT adoption reduces mortality for the most complex patients but does not affect outcomes for the median patient. This implies that the benefits from IT adoption are skewed to large institutions with a severe case mix. We decompose the impact of health IT into care coordination, clinical information management, and other components. The benefits from health IT are primarily experienced by patients whose diagnoses require cross-specialty care coordination and extensive clinical information management.