Clinical decision support system and hospital readmission reduction : Evidence from U.S. panel data

Using a large-scale panel of U.S. hospitals across health referral regions (HRRs), we empirically examine how a hospital's and its neighboring hospitals' adoption of the Clinical Decision Support System (CDSS) (and their meaningful use of CDSS) affects the hospital's quality of care. We find that CDSS adoption significantly reduces a hospital's readmission rate of heart failure, acute myocardial infarction, and pneumonia patients. We also reveal the regional spillover effects of adoption, where neighboring hospitals' CDSS adoption in the same HRR also reduces a hospital's readmission rates. Such spillover effects become more significant with electronic data interchange, facilitating seamless and errorless communications among hospitals. We also show that the spillover effects may depend on HRRs' different market structures and hospitals' meaningful-use status. Our findings offer theoretical and managerial insights for both healthcare researchers and practitioners.