Do health information technology investments impact hospital financial performance and productivity?

In this study, we examine the associations between health information technology expenses, intermediate business processes, hospital financial performance and productivity. Research using hospital financial data prior to the Health Information Technology for Economic and Clinical Health Act is limited. Using Definitive Healthcare data, we find that health information technology expenses, including information technology operating expense and capital expense, are positively associated with hospitals' return on assets and productivity. In addition, investments also generate effects via hospital's intermediate business processes, such as electronic health records (EHR) adoption, and quality measures. Our findings suggest that hospitals' health information technology investments involving intermediate business processes are associated with positive financial performance and productivity following the implementation of the Health Information Technology for Economic and Clinical Health Act.