Customer-facing information systems have received very little research attention, especially in the context of healthcare. As hospitals begin to provide healthcare consumers with online patient portals to view and manage personal health records and diagnostic results, little is known about whether or not the 'dominant paradigm' (Fichman 2004) of diffusion of innovations theory is sufficient for explaining the characteristics of early adopters. We suggest that a more nuanced understanding of early adoption of patient portals is needed because early adopters are not only the largest hospitals with substantial resources and capabilities residing within competitive environments. Specifically, we suggest that patient-portals are impacted by market characteristics and require Electronic Medical Records (EMRs) systems to be adopted first. We develop a non-linear, two-stage, econometric model with sample selection correction that controls for EMR adoption and estimates the impact of diffusion of innovation and market characteristics on the early adoption of patient portals by U.S. hospitals.