The impact of information technologies on manufacturing operations and performance is well established. However, scant research has been devoted to examining information technology (IT) investment among hospitals and how it influences patient care and financial performance. Using the lens of the Theory of Swift Even Flow (TSEF), we present an operations management-based perspective on the effect of IT in streamlining hospital operations. Specifically, we examined the role of IT on patient flow and its consequences for improved hospital efficiency and performance. Analysis of data from 567 U.S. hospitals shows that IT is associated with swift and even patient flow, which in turn is associated with improved revenues. Interestingly, we find that the improvement in financial performance is not at the expense of quality because we find similar effects of IT and patient flow in improvements in the quality of patient care. Further, we observed differential effects of swift flow and even flow on various measures of hospital performance. Although swift flow affects financial performance, even flow primarily affects quality performance. Taken together, they have a mutually reinforcing overall impact on hospital performance. The implications of these findings for hospital decision makers are that patient flow is an important mediating variable that is affected by IT and can significantly affect the quality of patient care and financial performance
