The diffusion of health information technology: practice characteristics and competition as drivers of adoption

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Callaway, Brant
Ghosal, Vivek
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This paper considers the adoption of Health Information Technology (HIT) by physician clinics with ten or fewer physicians. The paper considers the theoretical economics literature on technology adoption for a new technology and has a place in the empirical tests of these models. The two major hypotheses tested in the paper are that the probability of adopting HIT increases with the number of physicians working at the clinic and if the clinic is part of a chain of clinics, and that it also increases with increased competition at the market level measured by the number of clinics per 10,000 residents in a county. To test these hypotheses, the paper first estimates a baseline logit model followed by three hazard rate models. In each case, clinic size is found to have positive though not significant effect on the probability of adoption (in the logit model) or to decrease the predicted time to adoption for the clinic (in the hazard rate models), being in a chain of clinics is found to have a strong positive and significant on the probability of adoption, and increased competition is found to have a positive though not significant effect on the probability of adoption.
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