Economic externalities of health information technology. A game theoretic model for electronic health record adoption.

A presidential executive order in 2004 called for widespread adoption of electronic health records within 10 years. Proponents have shown this will lead to safe, affordable and consumer-oriented healthcare. Current EHR adoption has not kept pace; some estimates suggest that EHR adoption will occur over a significantly longer period. Implementation costs and return on investment are listed, among other reasons, as the predominant factors limiting rapid adoption. A widespread EHR adoption plateau is expected, with entities being unable or unwilling to adopt EHRs. This will lead to incentive-based requirements to achieve widespread adoption and the full potential of EHRs. This paper looks at externalities of health information technology between the major entities--payors, providers and consumers. These externalities necessitate implementation of incentive-based programs to achieve benefit equilibrium. Game theory is employed to model the behavior of these entities to capture the most equitable outcome. Prescriptive analysis is utilized to interpret and suggest optimal adoption behavior.