EXECUTIVE SUMMARY This research was motivated by the large investment in health information technology (IT) by hospitals and the inconsistent findings related to the effects of health IT adoption on hospital performance. Building on resource orchestration theory and the information systems literature, the authors developed a research model to investigate how the configuration strategies for sharing information under health IT systems affect hospital efficiency. The hypotheses were tested using data from the 2010 annual and IT surveys of the American Hospital Association, Centers for Medicare & Medicaid Services case mix index, and U.S. Census Bureau's small-area income and poverty estimates. The study revealed that in health IT systems, the breadth (extent) and depth (level of detail) of digital information sharing among stakeholders each has a curvilinear relationship with hospital efficiency. In addition, breadth and depth reinforce each other's positive effects and attenuate each other's negative effects, and their balance has a positive effect on hospital efficiency. The results of this research have the potential to enrich the literature on the value of adopting health IT systems as well as in providing practitioner guidelines for meaningful use.

In this paper, we carefully investigate previous literature to extract 10 relevant factors to explain the hospital profitability and build an econometrically well-specified model of explaining hospital profitability that does not suffer from omitted variable bias. Then we provide empirical evidence to a common belief that the objective function of a hospital varies with the type of hospital. We identified distinct objective functions for three types of hospitals: for-profit hospitals are driven by the overarching agreed-upon goal of profit maximization for shareholders; government hospitals, which are often the insurers of last resort, are obliged to put the public interest over profit objectives; nonprofit hospitals, which are legally prohibited from distributing profits, occupy the middle ground between for-profit and government hospitals. The results of this paper suggest that the ownership type should determine the factors on which hospitals focus and hence are useful to hospital management and academic researchers.

Given that prior research has provided inconsistent findings on the relationship between financial performance and the adoption of environmental management practices (EMPs), we aim to resolve the inconsistency by positing that the firm may consider different components of financial performance when making decisions. Specifically, we maintain that operational efficiency, measured based on net profit margin, is a key determinant of a firm’s decision to adopt EMPs. Additionally, we aim to examine environmental risk as one contingency that moderates the relationship between operational efficiency and EMP adoption. Employing a firm-fixed effect model to examine the effects of various measures of financial performance, including the net profit margin, return on asset (ROA), return on equity (ROE), and asset turnover, on the adoption rates of EMPs by firms, we find that firms with higher operational efficiency measured based on net profit margin are more inclined to adopt EMPs, while measures such as ROA, ROE, and asset turnover do not demonstrate any substantial effect. This study also finds that while environmental risk increases the possibility of adopting EMPs, it weakens the impact of operational efficiency on the adoption rates of EMPs.

We investigate the classic strategy choice between low cost and high quality when quality is not directly observable and legal liability about quality is uncertain. In addition, we investigate how for-profit and nonprofit organizations differ in their responses to a changing risk of quality liability. Our theoretical analysis predicts that nonprofit organizations, because of their lesser dependence on profits and greater dependence on support from donors and local communities based on perceived quality, will adjust their investment in quality more aggressively than for-profit organizations in response to exogenous changes in the risk of quality liability. This difference in responsiveness will be greater for organizations with better reputations for quality. We find support for these predictions using data on hospital medical expenditures, state medical malpractice awards, and tort reforms in the United States for 1997–2006.

The electronic sharing of health information holds the potential to enhance communication and coordination among hospitals and providers, ultimately leading to improved hospital performance. However, despite the benefits, hospitals often encounter significant challenges when it comes to sharing information with external parties. Our study aimed to identify the circumstances under which sharing information with external parties can result in changes in overall hospital costs, with a particular emphasis on various obstacles that hospitals may encounter, including lack of incentives or capabilities essential to facilitate effective information exchange. To achieve this goal, we obtain data from multiple sources, including the American Hospital Association (AHA) annual and IT surveys, the Center for Medicare and Medicaid Services (CMS) hospital compare dataset, and the Census Bureau’s small-area income and poverty estimates. Consistent with previous research, we observed a significant reduction in hospital costs when information was shared internally but not externally. However, our findings also revealed that the sharing of health information can lead to cost savings for hospitals when they encounter challenges such as the absence of incentives and capabilities regardless of whether the information is shared internally or externally. The implication of our study is simple but strong: perseverance and effort yield positive outcomes. Only when hospitals push through challenges related to sharing information can they achieve the anticipated advantages of information sharing. Based on our results, we suggest that policymakers should strategically target hospitals and providers that face challenges in sharing health information rather than focusing on those without obstacles. This targeted approach can significantly increase policy efficiency, and we emphasize the need for policymakers to address the specific areas where hospitals and providers encounter difficulties. By doing so, they can effectively “scratch where it itches” and address the core issues hindering the successful exchange of health information.

This study explores factors associated with the breadth (extent) and depth (level of detail) of digital information exchange among stakeholders in health information technology (IT) systems. Annual and IT surveys of the American Hospital Association and the U.S. Census Bureau’s small-area income and poverty estimates from 2014–2016 were analyzed for associations between key factors and breadth and depth of information exchange. OLS Regression was used with a sample consisting of 10,040 year-hospital observations. We found that hospital-level variables such as size, ownership type, system affiliation, physician-hospital arrangement, and revenue model affect information exchange. We further found that market-level variables such as concentration ratio, urbanness, and median household income, although they directly affect information exchange, do not moderate the relationship between hospital-level variables and information exchange. Our study fills a gap in the previous literature arising from the lack of research on the determinants of health information exchange.