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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.

Objectives: To determine the impact of health information technology (HIT) adoption and hospital-physician integration on hospital efficiency., Study Design: Using 2010 data from the American Hospital Association's (AHA) annual survey, the AHA IT survey, supplemented by the CMS Case Mix Index, and the US Census Bureau's small area income and poverty estimates, we examined how the adoption of HIT and employment of physicians affected hospital efficiency and whether they were substitutes or complements., Methods: The sample included 2173 hospitals. We employed a 2-stage approach. In the first stage, data envelopment analysis was used to estimate technical efficiency of hospitals. In the second stage, we used instrumental variable approaches, notably 2-stage least squares and the generalized method of moments, to examine the effects of IT adoption and integration on hospital efficiency., Results: We found that HIT adoption and hospital-physician integration, when considered separately, each have statistically significant positive impacts on hospital efficiency. Also, we found that hospitals that adopted HIT with employed physicians will achieve less efficiency compared with hospitals that adopted HIT without employed physicians., Conclusions: Although HIT adoption and hospital-physician integration both seem to be key parts of improving hospital efficiency when one or the other is utilized individually, they can hurt hospital efficiency when utilized together.