Healthc Inform Res.  2015 Apr;21(2):118-124. 10.4258/hir.2015.21.2.118.

Effects of Health Information Technology on Malpractice Insurance Premiums

• Kim HY
• Lee J

• KMID: 2284615
• DOI: http://doi.org/10.4258/hir.2015.21.2.118

Abstract

OBJECTIVES
The widespread adoption of health information technology (IT) will help contain health care costs by decreasing inefficiencies in healthcare delivery. Theoretically, health IT could lower hospitals' malpractice insurance premiums (MIPs) and improve the quality of care by reducing the number and size of malpractice. This study examines the relationship between health IT investment and MIP using California hospital data from 2006 to 2007.
METHODS
To examine the effect of hospital IT on malpractice insurance expense, a generalized estimating equation (GEE) was employed.
RESULTS
It was found that health IT investment was not negatively associated with MIP. Health IT was reported to reduce medical error and improve efficiency. Thus, it may reduce malpractice claims from patients, which will reduce malpractice insurance expenses for hospitals. However, health IT adoption could lead to increases in MIPs. For example, we expect increases in MIPs of about 1.2% and 1.5%, respectively, when health IT and labor increase by 10%.
CONCLUSIONS
This study examined the effect of health IT investment on MIPs controlling other hospital and market, and volume characteristics. Against our expectation, we found that health IT investment was not negatively associated with MIP. There may be some possible reasons that the real effect of health IT on MIPs was not observed; barriers including communication problems among health ITs, shorter sample period, lower IT investment, and lack of a quality of care measure as a moderating variable.

Keyword

Health Information Systems; Malpractice; Electronic Health Record; Investments; Insurance Premium

MeSH Terms

California
Delivery of Health Care
Electronic Health Records
Health Care Costs
Health Information Systems
Humans
Insurance*
Investments
Malpractice*
Medical Errors
Medical Informatics*