On Telemedicine Reimbursements and Hospital Adoption: A Policy Analysis Using Causal Inference Methods

ABSTRACT There continue to be substantial differences in the quality and access to healthcare available to communities across the United States. Researchers have called this the healthcare divide. Telemedicine, a technology‐mediated intervention that promises to bridge this healthcare divide, has been discussed by some as the great leveler. Policymakers, therefore, continue creating legislation that may drive hospitals to adopt telemedicine. Yet, how (or whether) such legislation achieves the goal of telemedicine adoption (and relatedly, healthcare divide reduction) is unclear. In the current study, we investigate a phased introduction of telemedicine reimbursement policies across various states in the United States between 2014 and 2019 to explore the causal effects of such policies on hospital adoption of telemedicine. Results suggest that while reimbursement policies drove the adoption of telemedicine services, this adoption was restricted to inpatient services rather than outpatient ones. We ground our investigation on extant theoretical insights from institutional isomorphism and highlight the limitations in our understanding of the adoption of telemedicine by hospitals in the country.