Essays on the economics of information sharing in healthcare
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Since the passage of the Health Information Technology for Economic and Clinical Health (HITECH) Act to reform the U.S. healthcare system, health information technology (IT) has attracted much attention from researchers, care practitioners, patients, and policy makers. Among various aspects of IT use in healthcare, information sharing has been considered as a key component in improving U.S. healthcare. In spite of numerous efforts to meaningfully use IT for information sharing, inefficiency issues still remain. This dissertation studies the economics of information sharing in healthcare and provides insights to formulate the right mechanisms to achieve the goal of IT-driven healthcare reform. The first essay examines the contract issues between a policy maker and care providers that can cooperate by implementing health information exchanges (HIEs). Using a gametheoretical model, we show that neither the traditional fee-for-service (FFS) payment model nor the pay-for-performance (P4P) models induce socially optimal outcomes, while an episodebased payment (EBP) model we identified induces the socially desirable effort levels and HIEs adoption. We further show that the value of an HIE is the highest under the FFS model and the lowest under the P4P models. Our findings imply that as payment models evolve over time, there is a real need to reevaluate the value of information sharing though HIE and the government policies that induce providers to adopt an HIE. The second essay studies the role of information sharing in formulation of policy instruments under the new risks of providers’ medical ligation owing to health IT. Specifically, we examine the role of information sharing in formulation of policies on healthcare operations in the presence of physicians’ liability concerns by using a game-theoretic model. We find when litigation is a concern, an underprovisioning policy may become optimal under the litigation risk, depending on the benefit and cost of the health service. We further show that strategically controlling the sharing of risk information restores the optimality of a standard policy (non-underprovisioning). The results of this study imply that the widespread practice of information sharing may induce underutilization of care resources to mitigate the medico-legal risks due to health IT. In the last essay, we study the impact of patient portals on treatment outcomes in the context of kidney allocation for transplant. Using a longitudinal data set of kidney transplant cases, we empirically show that with the implementation of patient portals for information sharing, patients are more likely to use care resources (donated kidneys) that are underutilized without access to a patient portal. However, the impact could be heterogeneous on sub-populations. This indicates that the efforts to bridge the digital divide may benefit some groups of patients at the expense of other groups, leading to further service disparities in the care service.