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US government investments in health information technology (IT) have focused on giving incentives for digital health records in hospital settings and by individual physicians. We evaluate the omission of ambulatory care centers, by studying the effects of healthcare IT on ambulatory care quality, which we measure using the rate of hospital admissions for conditions identified as sensitive to ambulatory care quality, using data from Medicare and the Nationwide Inpatient Sample. Results from difference-indifferences models that control for location and time fixed effects, as well as observable factors related to healthcare quality and population demographics, indicate that increased ambulatory IT adoption lowers local area ambulatory care sensitive (ACS) hospitalizations, suggesting quality improvements. The magnitudes imply that a 45% increase in ambulatory IT adoption in a county (the average increase over our sample period 2003-2012) lowers the ACS admission rate in that county by about 1.6%.

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