How Hospitals Differentiate Health Information Technology Portfolios for Clinical Care Efficiency: Insights from the HITECH Act.

This article examines how hospitals in the U.S. healthcare industry strategically differentiate their search for health information technology (HIT) to address cost-based performance shortfalls, with a focus on the evolving policy uncertainty surrounding the Health Information Technology for Economic and Clinical Health (HITECH) Act. Using a panel dataset of 3,319 hospitals from 2007 to 2014, the study finds that hospitals facing higher operating costs relative to peers tend to implement newer HIT technologies earlier than others, a behavior termed "search differentiation." Importantly, this relationship is moderated by the level of policy uncertainty across three phases of the HITECH Act: during moderate uncertainty (enactment phase), hospitals show greater search differentiation, while under high (conceptualization phase) or low uncertainty (enforcement phase), hospitals' HIT choices converge due to mimetic behaviors or coercive and normative pressures. The findings integrate behavioral theory of the firm and institutional theory to highlight how dynamic regulatory environments influence hospitals' technological innovation strategies, offering implications for hospital management and healthcare policymakers aiming to balance innovation exploration with widespread technology adoption.