Payer Mix and EHR Adoption in Hospitals

Payers are known to influence the adoption of health information technology (HIT) among hospitals. However, previous studies examining the relationship between payer mix and HIT have not focused specifically on electronic health record systems (EHRs). Using data from the Nationwide Inpatient Sample and the American Hospital Association Annual Survey, we examine how Medicare, Medicaid, commercial insurance, and managed care caseloads are associated with EHR adoption in hospitals. Overall, we found a weak relationship between payer mix and EHR adoption. Medicare and, separately, Medicaid volumes were not associated with EHR adoption. Furthermore, commercial insurance volume was not associated with EHR adoption; however, a hospital located in the third quartile of managed care caseloads had a decreased likelihood of EHR adoption. We did not find empirical evidence to support the hypothesis that payer generosity and other indirect mechanisms influence EHR adoption in hospitals. The direct incentives embedded in the Health Information Technology for Economic and Clinical Health Act may have a positive influence on EHR adoption - especially for hospitals with high Medicare and/or Medicaid caseloads. However, it is still uncertain whether the available incentives will offset the barriers many hospitals face in achieving meaningful use of EHRs