Adoption of Electronic and Personal Health Records: An Ecconomic Analysis

We investigate strategic issues surrounding the adoption of electronic health records (EHR) and personal health records (PHR) using an economic framework. Through our analysis, we find evidence that health care providers do not have an incentive to implement interoperable EHR systems even though the implementation of EHR systems (interoperable or otherwise) will increase consumer surplus. In this context, we conjecture that PHR platforms can fundamentally alter the incentives of health care providers, potentially leading to increased EHR adoption under some conditions. In a pluralistic health care system like that which exists in the United States, where health care providers have varying incentives to implement interoperable electronic health records, an online PHR platform can provide an alternative means for consumers to freely exchange their health records among different providers.