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Hospital Financial Performance: Does IT Governance Make a Difference?

Burke, Darrell PhD; Randeree, Ebrahim PhD; Menachemi, Nir PhD, MPH; Brooks, Robert G. MD

doi: 10.1097/01.HCM.0000285033.58677.32
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This study examined whether information technology (IT) governance, a term describing the decision authority and reporting structures of the chief information officer (CIO), is related to the financial performance of hospitals. The study was conducted using a combination of primary survey data regarding health care IT adoption and reporting structures of Florida acute care hospitals, with secondary data on hospital financial performance. Multiple regression models were used to evaluate the relationship of the 3 most commonly identified reporting structures. Outcome variables included measures of operating revenue and operating expense. All models controlled for overall IT adoption, ownership, membership in a hospital system, case mix, and hospital bed size. The results suggest that IT governance matters when it comes to hospital financial performance. Reporting to the chief financial officer brings positive outcomes; reporting to the chief executive officer has a mixed financial result; and reporting to the chief operating officer was not associated with discernible financial impact.

Author Affiliations: College of Information (Drs Burke and Randeree) and College of Medicine (Drs Menachemi and Brooks), Florida State University, Tallahassee, Florida.

Corresponding author: Darrell Burke, PhD, Medical Informatics, College of Information, Florida State University, Tallahassee, FL 32106-2100 (dburke@ci.fsu.edu).

This study was approved by the Florida State University Institutional Review Board.

Copyright © 2008 Wolters Kluwer Health, Inc. All rights reserved.