Opening the black box: measuring hospital information technology capability

Recently, health care investment in information technology (IT) has experienced a significant increase. Paralleling this increase has been an increase in IT capabilities. Despite the interest in and promises of IT in the health care setting, there is a paucity of empirical research that has attempted to define an organizational measure of IT capability. The dearth of research has contributed to the traditional belief that IT is perceived as a "black box," whereby organizational resources enter the box as "inputs" and are somehow transformed into positive outcomes for an organization. However, for positive outcomes to be realized, these outcomes must be measurable. This research uses a stakeholder perspective to develop a theoretically specified measure of IT capability. A latent construct, IT munificence, is proposed using tenets from diffusion of innovation theory and strategic contingency theory. The construct is tested using a sample of 1,545 acute care hospitals located in the United States. IT munificence fits the study data well, supporting the hypothesis that IT munificence represents a strategy of hospital IT capability.