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. 2022 May;13(3):665-676.
doi: 10.1055/s-0042-1750415. Epub 2022 Jul 27.

Higher Electronic Health Record Functionality Is Associated with Lower Operating Costs in Urban-but Not Rural-Hospitals

Claudia A Rhoades  1 , Brian E Whitacre  1 , Alison F Davis  2
Affiliations

Higher Electronic Health Record Functionality Is Associated with Lower Operating Costs in Urban-but Not Rural-Hospitals

Claudia A Rhoades et al. Appl Clin Inform. 2022 May.

Abstract

Objectives: The aim of the study is to examine the relationship between electronic health record (EHR) use/functionality and hospital operating costs (divided into five subcategories), and to compare the results across rural and urban facilities.

Methods: We match hospital-level data on EHR use/functionality with operating costs and facility characteristics to perform linear regressions with hospital- and time-fixed effects on a panel of 1,596 U.S. hospitals observed annually from 2016 to 2019. Our dependent variables are the logs of the various hospital operating cost categories, and alternative metrics for EHR use/functionality serve as the primary independent variables of interest. Data on EHR use/functionality are retrieved from the American Hospital Association's (AHA) Annual Survey of Hospitals Information Technology (IT) Supplement, and hospital operating cost and characteristic data are retrieved from the American Hospital Directory. We include only hospitals classified as "general medical and surgical," removing specialty hospitals.

Results: Our results suggest, first, that increasing levels of EHR functionality are associated with hospital operating cost reductions. Second, that these significant cost reductions are exclusively seen in urban hospitals, with the associated coefficient suggesting cost savings of 0.14% for each additional EHR function. Third, that urban EHR-related cost reductions are driven by general/ancillary and outpatient costs. Finally, that a wide variety of EHR functions are associated with cost reductions for urban facilities, while no EHR function is associated with significant cost reductions in rural locations.

Conclusion: Increasing EHR functionality is associated with significant hospital operating cost reductions in urban locations. These results do not hold across geographies, and policies to promote greater EHR functionality in rural hospitals will likely not lead to short-term cost reductions.

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Conflict of interest statement

None declared.

Figures

Fig. 1
Fig. 1
Cost breakouts and cost composition for urban and rural hospitals (in millions of dollars), 2016–2019.
See this image and copyright information in PMC

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