The proposed research seeks to provide a national evaluation of the impact of health information technology (IT) investments on hospital productive efficiency and quality. Specifically, we will evaluate the marginal impact of clinical IT investments on measures of hospital quality and efficiency, using a national sample of Medicare hospital admissions for 2000-2005, as well as the HIMSS annual survey of hospital IT investments. We will supplement this with qualitative data from a limited number of interviews with hospital administrators regarding their rationale, incentives and expectations for investing in health IT. Using an economic model of technical hospital production, we will address the following study aims: (1) To evaluate the relationship between a hospital's use of IT systems and patient length of stay; and (2) To identify whether and to what extent, there is a relationship between a hospital's use of clinical IT systems and medical outcomes during hospitalization. As part of both these aims, we will examine whether patients with multiple comorbidities respond differently to health IT than those with less illness burden. Since a hospital's decision to invest in clinical IT systems may not be random, it is important to control for this in an analysis of patient outcomes. There may be unobserved factors that are related to both IT investment and the provision of care that affect patient outcomes, making it difficult to separately identify the IT investment impact from the managerial effect in a cross-sectional analysis. To address this, we will use an instrumental variables estimator and multiple years of data in our analysis. Prior studies have not sufficiently dealt with this, raising questions about accuracy and generalizability. At the conclusion of this investigation, we will report on the marginal contribution of health IT to hospital efficiency and medical outcomes. This research represents a collaborative effort of investigators at the University of Minnesota, Carnegie Mellon University, and the Medical University of South Carolina. [unreadable] [unreadable] [unreadable]