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Hospital IT spending


Hospital investment in IT staff only raises the volume of news coverage, but investment in IT equipment improves the tenor of media coverage and boosts the hospital’s reputation, says a new study co-authored by Professor Michael Barrett of Cambridge Judge Business School.

Doctor working on digital tablet while standing in a hospital corridor.

In his first speech as UK Health and Social Care Secretary in 2018, Matt Hancock touted the importance of information technology in announcing £487 million for the “tech transformation” of Britain’s healthcare system. Like the government, hospitals enjoy publicising their latest investments in IT staff and equipment to improve care. But how does IT expenditure play out in the media in terms of gaining and sustaining hospital reputation?

A new study co-authored at Cambridge Judge Business School finds that while a hospital’s investment in IT staff can boost the volume of media coverage and thus make a hospital better known, investments in IT equipment positively affects a hospital’s general favourability as mirrored in the “tenor” of its media coverage – due mostly to prompting journalists to write less negatively about a hospital. (The volume of media coverage is not affected by investment in IT equipment.)

Michael Barrett.
Professor Michael Barrett

“The tone of such media coverage is important, because most patients are unable to gauge a hospital’s quality of care directly and therefore consider a hospital’s reputation in the media when making healthcare decisions,” says study co-author Michael Barrett, Professor of Information Systems & Innovation Studies at Cambridge Judge Business School. “The study finds that investing in IT equipment triggers journalists to write less negatively (rather than more positively) about a hospital – and thus can buffer hospitals from negative press and help them sustain their reputations in the media. While investing in IT staff results in more coverage, it does not improve the tone of coverage – and this is an important distinction.”

The study forthcoming in the journal Information Systems Research is based on an analysis of 175,973 articles in English newspapers that referred to IT investment decisions over five years at 152 English acute-care hospital organisations, in addition to in-depth interviews with newspaper editors, other journalists and hospital administrators in England and the United States.

The study includes three IT investment measures that cover major categories of organisational IT spending: IT equipment intensity including hardware and software for servers and desktops, IT services intensity such as maintenance, and IT staff intensity in terms of information management staff.

Because hospital reputation can be affected by factors other than IT expenditure, the study controls for such factors as inpatient length of stay, differences in hospital effectiveness as reflected in a hospital’s risk-adjusted inpatient mortality, organisational size, and patient workload.

Most previous studies of IT expenditure have focused on efficiency and effectiveness improvement attributed to such investments, but the new study instead demonstrates that IT investments can shape organisational reputation as reflected in the media.

“IT serves as a signal for unobservable organisational characteristics such as information processing capabilities or general organisational fitness,” the study says. “IT investments can serve as signals for superior information processing, state-of-the-art healthcare, and for being a modern hospital that is likely to influence patients’ choice.”

The authors say that the findings carry implications beyond healthcare by demonstrating the reputational importance of IT investment at a time when information security threats have received much attention. Through IT investment “the organisation buffers itself to some extent from negative future media coverage,” so “decision makers may consider using IT even more explicitly to signal technological progressiveness and superior decision-making capabilities.”

The study – entitled “How IT investments help hospitals gain and sustain reputation in the media: the role of signaling and framing” – is co-authored by Torsten-Oliver Salge of Aachen University, Davin Antons of Aachen University, Professor Michael Barrett of University of Cambridge Judge Business School, Rajiv Kohli of College of William and Mary, Eivor Oborn of Warwick Business School, and Stavros Polykarpou of University of Exeter.