Valuing hospital investment in information technology: Does governance make a difference?

Stephen T Parente, R. Lawrence Van Horn

Research output: Contribution to journalReview articlepeer-review

33 Scopus citations

Abstract

This article examines the investment of patient care information technology (IT) systems by a nationwide sample of U.S. short-term acute care hospitals and the resulting impact these systems have in the productivity of institutions from 1990-1998. Of particular interest is the extent to which for-profit and not-for-profit hospitals obtain different results from the adoption of IT systems. We find that the marginal effect of IT on for-profit hospital productivity is to reduce the number of days supplied, while in not-for-profit hospitals the marginal effect of IT is to increase the quantity of services supplied. This resulting effect is consistent with the differing objectives of not-for-profit and for-profit hospitals and demonstrates the positive marginal value of IT as a sustainable and prudent investment.

Original languageEnglish (US)
Pages (from-to)31-43
Number of pages13
JournalHealth Care Financing Review
Volume28
Issue number2
StatePublished - Dec 1 2007

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