Title: Health IT Diffusion and Physician Density
Abstract: This paper examines how the diffusion of advanced health information technology (HIT) affects the density of hospital-based (HB) physicians. Leveraging sharp county-level increases in HIT adoption driven by federal incentives, we compare physician density per 100k population in counties with rapid diffusion (treatment group) to those with slower or no uptake during our sample period (control group). Using an event-study framework, we find that HIT diffusion led to an increase in the HB physician rate in treated counties relative to control counties, and medical and surgical specialties account for most of the increase. Moreover, the growth in HB physician density is evident, absent from major consolidation activities, and contributes to overall growth in total physicians. This growth is concentrated among early-career physicians and in physician shortage areas. Mechanism tests suggest that physicians benefit financially from practicing in treated counties, with higher Medicare reimbursement, productivity, and hospital profits. Physician extenders also change in line with the new schedule. Outpatient surgeries rise the most in counties with moderate pre-period care utilization. Various robustness checks across methods, estimators, specifications, and samples support our results. Our findings suggest that strategic HIT investments can attract physicians, expand care capacity, and reduce geographic disparities in health care access. (Current working paper available at: https://ssrn.com/abstract=5159315, joint with Jason Huh, Jianjing Lin)
Lucy Xiaolu Wang is a tenure-track Assistant Professor at University of Massachusetts Amherst, a Faculty Research Fellow at the Max Planck Institute for Innovation and Competition, Germany, and a Faculty Associate at the Canadian Centre for Health Economics. Her research focuses on the economics of innovation & digitization in health care markets (national and global), particularly in the biopharmaceutical and digital health industries. She is a co-founder and inaugural convener for the Digital Health Technology special interest group at the International Health Economics Association, and currently serves as the inaugural program chair for the Innovation and Digitization program area at the American Society of Health Economists. Her projects have been funded by Cornell, CUFE, Duke, Institute for Humane Studies, Max Planck Institute, National Ministry of Education of China, RWJF, UMass, among others.
