Management Science: State privacy rules reduce EMR sharing by 24%
In states that have passed privacy laws restricting the ability of hospitals to disclose patient information, EMR sharing has suffered by more than 24 percent, according to an article in the July issue of Management Science, the journal of the Institute for Operations Research and the Management Sciences.

The researchers found that the drop is seen most clearly in reduced adoption of EMRs through networks of hospitals and medical providers. In states without such statutes, EMR adoption by one hospital is a spur to adoption by others, with one hospital's adoption increasing the likelihood of other hospitals in the local area adopting by 7 percent.

The authors warned that this effect could hurt the federal government's goal, set during George W. Bush's Administration, of having a U.S. health IT network in place by 2014. According to one estimate, widespread adoption of EMR systems could reduce health care expenses by $34 billion.

Authors Amalia R. Miller of the University of Virginia and Catherine Tucker of the Massachusetts Institute of Technology Sloan School of Management said that there are new technologies whose value depends on sharing information.

Some states have enacted medical privacy laws that restrict the ability of hospitals to disclose patient information. The authors also found that such statutes reduce EMR adoption by 11 percent per three-year period, or 24 percent overall.

However, they also noted that the ease with which information can be transferred electronically has led consumers to demand and policy makers to enact privacy protection. The privacy protection may be of benefit to the diffusion of information-sharing technologies if it reassures consumers, or it may inhibit the diffusion of information-sharing technologies if it imposes costs on firms who adopt the technology.

Miller and Tucker investigated the EMR trade offs. They wrote that hospitals may not adopt EMRs if patients withhold health information because they feel their privacy is not safeguarded by regulation. Alternatively, privacy protection may inhibit adoption if such regulation makes it too costly or difficult for hospitals to exchange patient information with one another.