As hospitals and physicians have steadily upped the ante on their investments in healthcare IT, there's always been a nagging doubt about just how much real value they were gaining in the transaction. True, a host of reports could point to the link between cutting edge technology and better care and improved patient safety, but the providers never really knew what – if any – hard financial return on investment was being achieved. The absence of a demonstrable bottom line has proven to be a consistent deterrent for some providers still sitting on the IT fence. But a group of researchers feel that by looking at the numbers of a large lineup of hospitals in one region, they have helped expose the silver lining that is attached to the IT budget. "Technologies by design have more and more benefit as they become more integrated with other systems in other areas of the hospital," says Nir Menachemi, PhD, the assistant professor and director of the Center on Patient Safety at the University of Florida State University College of Medicine. So far, many of the studies looking for a return on investment (or ROI) have centered on micro studies, examining the financial impact from adding one specific system. But in many of those cases, he adds, a new system in one wing of the hospital may deliver a hidden financial reward to another department. For example, he adds, if you automate the emergency room, the financial rewards may turn up on the in-patient operations side, which benefits from the improvement in patient records and care at the ER level. So Menachemi and a group of colleagues decided to change the classic approach to evaluating ROI. Instead of examining the micro case, they "zoomed up to the 50,000-foot level" to see how hospitals with more advanced IT systems compared financially with low-tech institutions at the macro level. By comparing financial returns and the number of clinical applications on hand in 82 Florida hospitals, Menachemi and his colleagues found that the hospitals that had invested in IT consistently outscored low-tech hospitals for total margin, operating margin and cash flow among both nonprofit and for-profit institutions. "Holding case mix constant," the investigators reported in the January-February issue of the Journal of Healthcare Management, "clinical IT was found to be associated with a statistically significant increase in inpatient revenue." In the total margin group, for example, the best bottom-line performers had an average of 2.8 more clinical IT applications, 2.3 more administrative IT applications and 1.3 more strategic IT applications. For hospitals that aren't making the investment, says Menachemi, the implications are clear. "They're walking down a dead-end street." "The fact that the higher performing organizations in the study without fail showed higher levels of IT adoption is a clanging bell to those organizations that have lagged behind the standards of our industry,'' wrote Perry T. White, a healthcare analyst and senior manager at Pershing, Yoakley and Associates in Birmingham, Ala., in an accompanying commentary. Menachemi is quick to add that he was putting two and two together when he came to his conclusions on IT investments. Under-funded hospitals suffering from a lack of capital may be unable to make these kinds of investments, and more profitable hospitals typically have a superior brand of hospital manager who is more likely to deliver better returns. But the growing acceptance of IT in healthcare and better understanding of its benefits is unmistakable. "Obviously, it's not a secret that healthcare is a decade or two behind other industries and as a result it's not as efficient as it can be," says Menachemi. The reasons are two-fold: Organizational cultures are different than in other industries and it's hard to force physicians to adopt new technology, which can be difficult to master. "But I think healthcare is probably one of the most information intensive industries and as a result it probably took longer to develop products and gain a critical mass. "Every hospital executive in our state, and probably the country, is thinking about it; more so than they ever have," adds Menachemi. "In terms of critical mass of awareness, I think we're there. In terms of adoption, we're not. "I know many hospitals that are being left behind by severe financial constraints. Anecdotally, I know some hospitals in Florida, located in rural communities, that don't have the capital, and in some cases don't have the human resources to do it." But there's no doubting that the hospitals that are lagging behind badly want to catch up. "In fact," says Menachemi, "we had a project where we had an information system we wanted to study in a rural hospital environment. We looked at four candidates, and all were extraordinarily interested in being a test bed."