Hospitals with advanced IT have more admissions, better profits

Not-for-profit hospitals that have advanced IT systems--and/or have received quality awards--tend to be more profitable than other hospitals, according to a new report from Fitch Ratings.

In its review, Fitch looked at 291 hospitals that were part of the company's rated portfolio in 2009. Of the total portfolio hospitals, 24 (8 percent) were categorized as HIMSS stage 6 or stage 7 hospitals for their high rates of adoption of electronic health records (EHRs) and other advanced IT systems. In addition, 75 of the hospitals received some form of recognition for high quality of care.

Just over 80 percent of hospitals with a quality award or advanced IT recognition received at least an "A-" credit rating--compared with 67 percent of overall hospitals studied.

Fitch also reported that the size of a hospital's revenue, unrestricted case, and investments were specifically linked to achievements in "both quality and IT infrastructure." For hospitals with highly rated IT systems, the average total revenue was 46 percent higher than other portfolio hospitals.

At quality hospitals, the average total revenue was about 30 percent higher than portfolio hospitals. Twelve hospitals that fit both standards had 76 percent greater total revenue than portfolio hospitals.

Admissions were impacted as well, according to Fitch: Compared to portfolio hospitals, which saw an increase in admissions of 1.4 percent per year, IT hospitals experienced increased admissions of 4.7 percent, and quality hospitals has a 0.5 rise. The 12 hospitals that fit both qualifiers showed a 4.4 percent per year boost in patient admissions.

For more details:
- see the Fitch Ratings report (reg. required)
- view Becker's Hospital Review article
- view the DOTmed News article

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