Rising healthcare costs and the delivery of reliable and effective patient care are arguably one of the greatest problems facing society today. Information technology investment is widely cited as a potential solution to this problem. At the core of healthcare is a tension. On the one hand you want healthcare providers to develop standardized procedures for treatment of disease while looking for better treatments. Other the other hand the delivery of care occurs through knowledge, skills, and judgment of physicians. There is likely to be variation in how physicians apply this knowledge in practice. In an effort to reduce cost and enhance reliability providers seek to disseminate these procedures with greater speed than in the past. Research suggests that by reducing treatment inconsistency, healthcare costs in the United States alone could be reduced by nearly 700 billion dollars without impacting patient outcome. Theory suggests information technology, in the form of electronic medical records (EMR), should reduce treatment inconsistency by reducing search costs, increasing the speed of information diffusion, reducing monitoring costs, and facilitating a more aggregate study of outcomes. Data for this study was gathered from over 700,000 patient admissions from multiple archival sources. Using a cross-classified hierarchical model results demonstrate that information technology does increase consistency of treatment patterns, for diagnoses with a high number of potential treatments, when EMR is: a) present for a sufficient amount of time or b) in larger hospitals or c) used in an integrated delivery system or d) there is an increased ratio of salaried physicians to total physicians. Implications for future research suggest that the effectiveness EMR are contextually dependent upon both the clinical setting and the disease to which EMR is applied. Implications for practice suggest that impacts from EMR adoption are likely to vary between practice areas, require a substantial amount of time to yield positive results, and are more likely to yield positive results in larger hospitals and in those hospitals where more physicians using the system are employed directly by the hospital.
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