Hospitals in Tech-Rich Regions Have Lower IT Costs

It's easier to attract talent in those areas.

Being located away from an “IT-intensive” market can add as much as 4 percent to the long-term costs of electronic health record implementation, university researchers found.

A study of 4,231 hospitals by Northwestern University’s Kellogg School of Management found that hospitals in areas with few IT firms saw costs rise by up to 4 percent as long as six years after adopting EHRs, reported this week.

Hospitals in IT-intensive markets that adopted basic EHRs between 1996 and 2009 saw costs fall by 3.4 percent three years after implementation. Those adopting advanced EHRs saw costs decrease by 2.2 percent after three years, according to the report, based on a paper released in August by the National Bureau of Economic Research.

Basically, it’s harder to find workers with the requisite IT skills outside regions with plenty of technology companies, according to the report.

Kellogg professor David Dranove, a co-author of the report, told that he would expect medical practices with the same geographical challenges to have the same problems as hospitals in attracting IT talent.