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

Parente ST, Van Horn RL - Health Care Financ Rev (2006)

Bottom Line: Of particular interest is the extent to which for-profit and not-for-profit hospitals obtain different results from the adoption of lT 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.

View Article: PubMed Central - PubMed

Affiliation: University of Minnesota, USA. sparente@csom.umn.edu

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 lT 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.

Show MeSH
Time Series Cumulative Adoption of Patient Care Information Technology Systems, by Hospital Type: 1990-1998
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Related In: Results  -  Collection


getmorefigures.php?uid=PMC4194982&req=5

f1-hcfr-28-2-031: Time Series Cumulative Adoption of Patient Care Information Technology Systems, by Hospital Type: 1990-1998

Mentions: Figure 1 presents the adoption curve for IT systems by for-profit and not-for-profit hospitals along with a plot of the mean ROA by hospital type. Throughout most of the study period the percentage of not-for-profit hospitals with the patient care IT system was greater than in the for-profit hospitals. Clearly, not-for-profit hospitals appear to be early adopters of the technology. It is also noteworthy that at this very general level there does not appear to be a relation between the financial performance of the hospital and adoption of the IT system. Throughout most of the 1990s, not-for-profit hospitals had negative operating ROA, yet they invested in these expensive IT systems. It is noteworthy that both not-for-profit and for-profit hospital financial performance suffers materially from 1997 onward, largely the result of the 1997 Balanced Budget Act.


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

Parente ST, Van Horn RL - Health Care Financ Rev (2006)

Time Series Cumulative Adoption of Patient Care Information Technology Systems, by Hospital Type: 1990-1998
© Copyright Policy
Related In: Results  -  Collection

Show All Figures
getmorefigures.php?uid=PMC4194982&req=5

f1-hcfr-28-2-031: Time Series Cumulative Adoption of Patient Care Information Technology Systems, by Hospital Type: 1990-1998
Mentions: Figure 1 presents the adoption curve for IT systems by for-profit and not-for-profit hospitals along with a plot of the mean ROA by hospital type. Throughout most of the study period the percentage of not-for-profit hospitals with the patient care IT system was greater than in the for-profit hospitals. Clearly, not-for-profit hospitals appear to be early adopters of the technology. It is also noteworthy that at this very general level there does not appear to be a relation between the financial performance of the hospital and adoption of the IT system. Throughout most of the 1990s, not-for-profit hospitals had negative operating ROA, yet they invested in these expensive IT systems. It is noteworthy that both not-for-profit and for-profit hospital financial performance suffers materially from 1997 onward, largely the result of the 1997 Balanced Budget Act.

Bottom Line: Of particular interest is the extent to which for-profit and not-for-profit hospitals obtain different results from the adoption of lT 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.

View Article: PubMed Central - PubMed

Affiliation: University of Minnesota, USA. sparente@csom.umn.edu

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 lT 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.

Show MeSH