A Multi-level Analysis of the Impact of Health Information Technology on Hospital Performance

This paper examines the impact of health information technology (HIT) implementation and meaningful use on hospital productivity and financial performance. Focusing specifically on the healthcare sector allows us to examine at a more granular level the manner in which hospitals and other healthcare organizations adopt, implement and use their HIT systems and how such use impacts their performance. We propose hypotheses predicting a hospital’s operating and financial performance as a function of HIT capital, meaningful use of HIT, and the complementary effect of health information exchange (HIE) coordination with HIT use. Secondary survey data over a three-year period (2008-2010) on various HIT and hospital performance measures collected from 2,557 U.S. hospitals were analyzed by hierarchical linear modeling (HLM) approach. We find reasonably good support for our hypotheses linking HIT capital and meaningful use of HIT to productivity metrics and to financial performance, after controlling for a number of key factors. These findings show that it is important to track and measure meaningful use over and beyond simply looking at HIT adoption statistics.