Hospital Investment in Information Technology:

We examine the adoption of patient care IT systems by US short-term acute care hospitals and the resulting impact these systems have in the productivity of hospitals. Of particular interest is the extent to which forprofit and non-profit hospitals obtain different results from the adoption of IT systems. We find that the marginal effect of IT on for-profit hospital productivity is to reduce the number of days supplied, while in non-profits the marginal effect of IT is to increase the quantity of services supplied. This evidence is consistent with the differing objectives of non-profit and for-profit hospitals *Corresponding author: Stephen T. Parente, Ph.D., Assistant Professor, Department of Healthcare Management, University of Minnesota, Carlson School of Management, 321 19 Avenue South, Room 3-149, Minneapolis, MN 55455. 612-624-1391 (voice) 612-624-8804 (fax), [email protected]