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Journal of Healthcare Engineering
Volume 2, Issue 3, Pages 285-302
Research Article

Realizing the Value Proposition: A Longitudinal Assessment of Hospitals' Total Factor Productivity

Timothy R. Huerta,1 Eric W. Ford,2 William F. Ford,3 and Mark A. Thompson1

1Rawls College of Business, Texas Tech University, Lubbock, TX, USA
2Bryan School of Business, The University of North Carolina Greensboro, Greensboro, NC, USA
3Jennings A. Jones College of Business, Department of Economics and Finance, Middle Tennessee State University, Murfreesboro, TN, USA

Received 1 August 2010; Accepted 1 June 2011

Copyright © 2011 Hindawi Publishing Corporation. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


U. S. hospitals are under continual pressure both to increase productivity and to improve quality through the use of Health Information Technology. This paper analyzes 3,187 US hospitals, using data reported to the American Hospital Association, to assess changes in productivity over a five-year period (2002-2006). The Malmquist Indices derived indicate that Total Factor Productivity (TFP) and Efficiency Change (EFFCH) both increased during that timeframe. The low Technological Change (TC) index indicates that improvements to organizational processes did not contribute substantially to productivity. A secondary analysis examined the use of Computerized Physician Order Entry (CPOE) in relationship to the three indices. TFP trended positively for those hospitals further into the CPOE implementation process.