JMIR Publications

ABSTRACT

Background:

The Health Information Technology for Economic & Clinical Health (HITECH) Act of 2009 was legislated to reduce healthcare costs, improve quality, and increase patient safety. Providers and organizations were incentivized for exhibiting meaningful use of certified Electronic Health Record (EHR) systems in order to achieve this objective. EHR adoption is an expensive investment, given the resources and capital that are invested. Due to the cost of the investment, a return on the EHR adoption investment (ROI) is expected.

Objective:

This study performed a value analysis of EHRS. The objective of this study was to investigate the relationship between EHR adoption levels and financial and clinical outcomes by combining both financial and clinical outcomes into one conceptual model.

Methods:

Multivariate relationships between different levels of EHR adoption and financial and clinical outcomes along with the time variant control variables were examined using moderation analysis with a longitudinal fixed effects model. Since it is unknown as to when hospitals begin experiencing improvements in financial outcomes, additional analysis was conducted using a 1- or 2-year lag for profit margin ratios.

Results:

5,768 hospital year observations were analyzed over the course of four years. According to the results of the moderation analysis, as the readmission rate increases by one unit, the effect of a one-unit increase in EHR adoption level on the operating margin decreases by 5.38%. Hospitals with higher readmission payment adjustment factors have lower penalties.

Conclusions:

This study fills the gap in the literature by evaluating individual relationships between EHR adoption levels and financial and clinical outcomes, in addition to evaluating the relationship between EHR adoption level and financial outcomes, with clinical outcomes as moderators. This study provided statistically significant evidence, indicating that there is a relationship between EHR adoption level and operating margins when this relationship is moderated by readmission rates. This finding could further be supported by evaluating more recent data to analyze whether hospitals increasing their level of EHR adoption level would decrease readmission rates, resulting in an increase in operating margins. Hospitals would incur lower penalties as a result of improved readmission rates, which would contribute toward improved operating margins.