The influence of IT investment on hospital efficiency and quality are of great interest to healthcare executives as well as insurers. Few studies have examined how IT investments influence both efficiency and quality or whether there is an optimal IT investment level that influences both in the desired direction. Decision makers in healthcare wonder if there are tradeoffs between their pursuit of hospital operational efficiency and quality. Our study involving a 2-stage double bootstrap DEA analysis of 187 US hospitals over 2. years found direct effects of IT investment upon service quality and a moderating effect of quality upon operational efficiency. Further, our findings indicate a U-shaped relationship between IT investments and operational efficiency suggesting that IT investments have diminishing returns beyond a certain point.
Bibliographical noteNOTICE: this is the author’s version of a work that was accepted for publication in Expert systems with applications. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Gholami, R, Añón Higón, D & Emrouznejad, A, 'Hospital performance: efficiency or quality? Can we have both with IT?' Expert systems with applications, vol. 42, no. 12 (2015) DOI http://dx.doi.org/10.1016/j.eswa.2014.12.019
- information technology
- operations management