Productivity of Information Systems in the Healthcare Industry

Abstract

This research paper analyzes the impact of information technology (IT)in a healthcare setting using a longitudinal sample of hospital data from 1976 to 1994. We classify production inputs into labor and capital categories. Capital is classified into three components—medical IT capital, medical capital, and IT capital—and labor is classified into two components, medical labor and IT labor. Results provide evidence that IT contributes positively to the production of services in the healthcare industry.