Measuring information technology investment among Canadian academic health sciences centres

Many recent studies have attempted to accurately measure the expenditure by hospitals in the area of new information technology (IT), for example see Leonard 1998 and Pink et al. 2001. This is usually done as an exercise to compare the healthcare sector with other industries that have had much more success in implementing and leveraging their IT investment (Willcocks 1992; Chan 2000). It is normally hoped that such investigation would help explain some of the differences among the various industries and provide insight into where (and how much) future IT spending should occur in healthcare (Leonard 2004). Herein, we present the results from a study of eight Canadian academic health sciences centres that contributed data in order to analyze the amount of information technology spending in their organizations. Specifically, we focus on one specific indicator: the IT spend ratio. This ratio is defined as the percentage of total IT net costs to total hospital net operating costs, and aims to provide a "relative (or percentage) measure of spending" so as to make the comparisons meaningful. One such comparison shows that hospitals spend only 55% of the amount the financial services sector spends.