The call for widespread adoption of electronic medical records has prompted some states to pass stringent privacy laws to protect their residents against fraud or identity theft. But a new analysis finds these laws seem to significantly diminish the effectiveness of the new technology.

Many of the new technologies available to healthcare providers depend on information sharing to be effective, study authors note. If one hospital adopts the use of EMRs, they explain, that increases the likelihood of nearby hospitals adopting EMRs by 7%. Conversely, in states where EMR privacy laws restrict the sharing of patient information, record sharing has been reduced by as much as 24%. Recently, the American Association of Homes and Services for the Aging found that nursing homes lead the healthcare field in overall adoption of electronic medical records.

The Bush administration largely endorsed the idea of a national health IT infrastructure, and has set a goal of full implementation by 2014. Ideas for spurring adoption of EMRs have been present in most draft versions of new healthcare reform legislation, but no final plan has emerged. The report, “Privacy Protection and Technology Diffusion: The Case of Electronic Medical Records,” appears in the current issue of Management Science.

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