Increased health information technology investment decreases uncompensated care cost: A study of Texas hospitals

BACKGROUND: Many previous research studies have demonstrated that investing in health information technology (IT) in a hospital setting has potential benefits, including eliminating duplicate or unnecessary tests and adverse drug events, conserving healthcare provider time and effort by making information more readily available, and reducing cost by increasing efficiency or productivity metrics. However, the effect of health IT on uncompensated care has not been reported yet. OBJECTIVE: The objective of this study was to examine the effect of health IT investment on uncompensated care provided by hospitals. METHODS: The general linear model (GLM) with log link and normal distribution was used to estimate the association between health IT spending and the provision of uncompensated care using Texas American Hospital Association (AHA) data from 2004 to 2010. RESULTS: The total health IT investment was significantly and negatively associated with the provision of uncompensated care. When health IT investment was increased by 10%, the provision of uncompensated care was reduced by 2.7%. Health IT investment was also significantly and negatively associated with bad debt. When health IT investment was increased by 10%, bad debt was decreased by 3.2%. CONCLUSION: Health IT investment was negatively associated with the provision of uncompensated care. This means that health IT could reduce administrative burden and improve efficiency of tracking patient insurance status and billings.