Here is proof that, when it comes to hospitals, the carrot works as well as, or better than, the stick.

A new study published in Health Affairs found that Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH) incentives paid to hospitals to implement electronic health records (EHRs) apparently had the desired effect.

The study led by researchers from Harvard University and the University of Michigan found that facilities eligible for payments had adoption rates 8% higher per year over five years compared to those that were not.

The results were based on data from 4,268 incentive-eligible and 851 ineligible hospitals from 2008 to 2015 — before and after the incentives were implemented.

Eligible hospital annual adoption rates for EHR systems jumped from 3.2% before incentives to 14.2% after. However, at the same time, facilities that were ineligible for the incentives increased EHR adoption rates only from 0.1% to 3.3%.

"Our findings reinforce the common notion that incentives work, and we now know that's true for health IT infrastructure," explained co-author Julia Adler-Milstein, PhD, associate professor at the U-M School of Information and School of Public Health. "So, where market failures exist, and given the current political interest in infrastructure investment, government incentives should, perhaps, be more widely used."

HITECH provided incentives — totaling about $21 billion — to acute care hospitals to adopt EHRs, seeking to improve the quality and efficiency of care. While critics of the incentives argued that hospitals might have adopted EHRs on their own without government incentives, Adler-Milstein pointed to the study results as proof that the 2009 HITECH Act had a significant effect.

“Our results support the argument that recent gains in EHR adoption can be attributed specifically to HITECH, which suggests that the act could serve as a model for ways to drive the adoption of other valuable technologies,” she concluded.

“I personally believe that, while it may not feel like money well spent right now (given the many challenges with EHRs), it will a decade from now as we continue to work to improve them," Adler-Milstein added. "And we will see HITECH as the catalyst that started the U.S. healthcare system's IT transformation."