Texas hospitals with higher health information technology expenditures have higher revenue: A longitudinal data analysis using a generalized estimating equation model

BACKGROUND The benefits of health information technology (IT) adoption have been reported in the literature, but whether health IT investment increases revenue generation remains an important research question. METHODS Texas hospital data obtained from the American Hospital Association (AHA) for 2007-2010 were used to investigate the association of health IT expenses and hospital revenue. The generalized estimation equation (GEE) with an independent error component was used to model the data controlling for cluster error within hospitals. RESULTS We found that health IT expenses were significantly and positively associated with hospital revenue. Our model predicted that a 100% increase in health IT expenditure would result in an 8% increase in total revenue. The effect of health IT was more associated with gross outpatient revenue than gross inpatient revenue. CONCLUSION Increased health IT expenses were associated with greater hospital revenue. Future research needs to confirm our findings with a national sample of hospitals.