Health information technology and its impact on the quality and cost of healthcare delivery

The impact of health information technologies (HIT) on the quality of healthcare delivery is a topic of significant importance and recent research has yielded mixed evidence. We use archival data on HIT usage in combination with data on quality of care processes to conduct a three-year longitudinal study of a large panel of U.S. hospitals. Our analysis extends earlier research on the association between HIT and healthcare quality among healthcare providers that have previously focused on outcomes associated with cost reduction. We study the impact of HIT applications, not only on hospital operating expenses, but also on the process quality associated with evidence-based measures for treatment of four major health conditions. Our results indicate a positive association between usage of clinical information systems and patient scheduling applications and conformance with best practices for treatment of heart attacks, heart failures, and pneumonia. Our results also suggest that usage of financial management systems is associated with lower hospital operating expenses. Furthermore, we find that not-for-profits and urban hospitals are more likely to exhibit greater conformance with process quality metrics, while for-profits exhibit lower operational expenses. Our results have important policy implications for investments in health IT and studying their cost and quality implications.