Many people have feared that robots, computers, and other forms of technology will take people’s jobs. Conventional wisdom holds that healthcare workers have been largely immune from these technological changes to date. However, a new paper from Lu, Rui and Seidmann examines whether technological advances–specifically computerized provider order entry (CPOE)–affects employment at nursing homes. Using data on CPOE adoption and measures of employment from Online Survey Certificate and Reporting (OSCAR), they find:
Using unique nursing home IT data from 2006 to 2012, we find that the licensed nurse staffing level decreases by 5.8% in high-end nursing homes but increases by 7.6% in low-end homes after the adoption of automation technology. Our research explains this by analyzing the interplay of two competing effects of automation: the substitution of technology for labor and the leveraging of complementarity between technology and labor. We also find that increased automation improves the ratings on clinical quality by 6.9% and decreases admissions of less profitable residents by 14.7% on average.
The authors also note that they find “no effect on overall labor demand, but its effect on staffing
decisions depends crucially on a nursing home’s vertical position in the local market. ”
Source:
- Susan F. Lu, Huaxia Ru, Abraham Seidmann. Does Technology Substitute for Nurses? Staffing Decisions in Nursing Homes. Forthcoming in Management Science.
I think profit will drive these decisions, which will open up opportunities for others. My sense is that we are going to get to the point where human assisted facilities become an area of differentiation. Especially with nursing home where some of the residents are already on edge about being in a nursing home, taking away the human factor and replacing it with technology will soon face a backlash, where those facilities that go out of their way to provide a dignified, pleasant human experience will start to see more business and referrals.