Texas hospitals with higher health information technology expenditures have higher revenue: A longitudinal data analysis using a generalized estimating equation model.

Jinhyung Lee,Jae-Young Choi

doi:10.1186/s12913-016-1367-9

Abstract

BackgroundThe benefits of health information technology (IT) adoption have been reported in the literature, but whether health IT investment increases revenue generation remains an important research question.MethodsTexas hospital data obtained from the American Hospital Association (AHA) for 2007–2010 were used to investigate the association of health IT expenses and hospital revenue. The generalized estimation equation (GEE) with an independent error component was used to model the data controlling for cluster error within hospitals.ResultsWe found that health IT expenses were significantly and positively associated with hospital revenue. Our model predicted that a 100 % increase in health IT expenditure would result in an 8 % increase in total revenue. The effect of health IT was more associated with gross outpatient revenue than gross inpatient revenue.ConclusionIncreased health IT expenses were associated with greater hospital revenue. Future research needs to confirm our findings with a national sample of hospitals.

Highlights

The benefits of health information technology (IT) adoption have been reported in the literature, but whether health IT investment increases revenue generation remains an important research question
Analysis To understand the effect of health IT expenses on hospital revenue, we modeled the effect of hospital health IT expenses on total revenue controlling for observable hospital utilization, hospital and market characteristics such as inpatient days, outpatient and emergency visits, government admission, bed size, system membership, ownership, teaching status and competition
The current work investigates the association between health IT adoption and hospital revenue

Summary

Introduction

The benefits of health information technology (IT) adoption have been reported in the literature, but whether health IT investment increases revenue generation remains an important research question. The Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009, part of the American Reinvestment and Recovery Act, allocated nearly $29 billion over ten years for the implementation and meaningful use of electronic health records (EHRs) throughout the United States (U.S.) health care delivery system. A great deal of prior research has demonstrated the potential benefits of adopting health IT in the hospital setting These benefits include elimination of duplicate or unnecessary tests and adverse drug events, conserving healthcare provider time and effort by making information more readily available, and cost savings associated with increased efficiency or productivity metrics [1]. Other reviews have shown positive results in specific aspects of medication management [3,4,5,6,7] and chronic disease management such as preventive care and reminders [8,9,10,11,12]

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