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According to research by the National Bureau of Economic Research, health systems that are within proximity to information technology companies and these companies’ experience with healthcare IT installations are among the biggest factors of whether the addition of EMRs will provide either a positive or a negative financial impact.  Data collected painted a clear picture showing urban hospitals realizing a meaningful ROI in approximately half the time of rural hospitals. Community hospitals in the rural parts of the nation are faced with increasing costs for at least six years, according to studies.

The researchers examined information for hospitals that adopted EMRs during the years of 1996 through 2009 and discovered that in IT concentrated markets, health systems experienced a 3.4% decrease in costs three years after adopting a basic EMR and a 2.2% cost decrease three years after adopting an advanced EMR. Whereas healthcare providers in areas with a limited IT market presence experienced up to a 4% increase in costs going on six years after adoption of EMRs.

The authors, who included David Dranove, a professor in the Kellogg School of Management at Northwestern University, noted, “We find the evidence consistent with our reframing of the conundrum, namely, differences in outcomes relate to differences in local conditions.” These findings shed light on the uneven level of adoption of EMRs, despite a federal program to provide $20 billion in adoption incentives and penalties to non-adopting providers. The study was aimed at identifying why Electronic Medical Records provide cost savings to some providers, while increasing costs for others.

The full study can be purchased at https://hq.ssrn.com/login/pubSignInJoin.cfm?nber_id=w18281

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