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As a result of a recent federal government mandate, an increasing number of hospitals have decided to adopt electronic medical record (EMR) systems. This initiative is expected to lead toward more efficient and higher quality health care; however, little is known about governance characteristics and organizational performance for EMR adopters. Our goal is to inform theory and practice by examining hospitals with a sophisticated EMR and comparing those hospitals to similar hospitals (with a less sophisticated EMR) to understand the association between information technology (IT) governance characteristics and the implications on financial performance. Leveraging elements of the upper echelon theory, we posit that hospitals in which the chief information officer (CIO) reports to the chief executive officer, CIO turnover is low, and an IT steering committee is present are more likely to have a sophisticated EMR. We argue that EMR sophistication leads to improved financial performance. Our results underscore the importance of continuity in the CIO position on successful EMR implementations. Results also show that hospital size and financial performance are strongly associated with EMR sophistication. In addition, we find that a sophisticated EMR appears to be a fundamental element in improving hospitals' revenue cycle management. Moreover, † Corresponding author. 484Electronic Medical Records we find that hospitals with a sophisticated EMR appear to be more profitable. Finally, we observe that total payroll expense adjusted by total discharges drops among the sophisticated hospitals, potentially due to an increase in employee productivity. These insights can serve as a basis for tempering expectations relative to the financial impact of EMR adoption.

Hospitals in the United States (U.S.), and the healthcare industry as a whole, are experiencing major transformations that will likely affect every facet of our society. One such example is a federal regulation known as the Value‐based Purchasing (VBP) program, which shifts hospital reimbursements for services rendered away from a fee‐for‐service model to a value‐based model. This change requires hospitals to more accurately track and document resources/assets utilized in the delivery of care, in addition to appropriate health outcomes. Hence, the focus of this study is on assessing the effect of the joint use of RFID and EDI on hospital performance, namely supply chain cost efficiency, personnel expenses, and hospital readmission rates. The findings, based on secondary, longitudinal data on more than 3300 US hospitals spanning eight years, suggest that hospitals bundling RFID and EDI experience an initial decrease in supply chain cost efficiency and increase in personnel expenses, with no immediate impact on readmission rates. However, over time, better supply chain cost efficiency, lower personnel expenses, and a consistent reduction in readmission rates accrue from the long‐term and consistent leveraging of the RFID‐EDI bundle. Thus, the overarching contribution of this study is the elucidation of how and along what measures the bundled leveraging of RFID and EDI improves hospital performance, as well as which measures of hospital performance are time (in)variant. We round out this study with a discussion of our findings, their implications, and offer directions for future research.

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