Title: Is health information technology investment related to the financial performance of US hospitals? An exploratory analysis

Authors: Stephen T. Parente, Jennifer L. Dunbar

Addresses: University of Minnesota and the Project HOPE Center for Health Affairs, Carlson School of Management, 321-19th Avenue South, Minneapolis, MN 554455-9940, USA. Project HOPE Center for Health Affairs, 7500 Old Georgetown Rd., Suite 600, Bethesda, MD 20814, USA

Abstract: Information systems lie at the centre of organised delivery systems, providing opportunities to improve access, outcomes, and quality benefiting consumers, providers, insurers, and purchasers. However, it is unknown whether hospital financial performance improves after investment in these systems. Our study finds that hospitals with integrated information systems had a 1.7% higher total margin and a 1.0% higher operating margin in 1993 than hospitals without integrated information systems. This greater profitability persisted between 1993-1996, with an average 0.87% greater total margin among hospitals with integrated information systems than without. Our analysis suggests that investments by US hospitals in integrated information systems contributes to improved financial performance and offers subjects for future research.

Keywords: information technology; information systems; hospital; financial performance; capital investment; total and operating margin.

DOI: 10.1504/IJHTM.2001.001104

International Journal of Healthcare Technology and Management, 2001 Vol.3 No.1, pp.48-58

Available online: 30 Jun 2003 *

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