Who is this research for? This research is relevant for hospital executives and healthcare budget analysts evaluating where analytics investments generate measurable operational and financial returns.
Executive Summary
This research from Abhijith Anand at the Sam M. Walton College of Business (Department of Information Systems) examines how hospital investments in healthcare analytics affect clinical efficiency and financial performance. These analytics include tools that support automated triage, optimize intensive care unit (ICU) treatment decisions, and improve cross-department care coordination. Using five years of proprietary monthly data from 11 U.S. hospitals, the study evaluates how these investments influence performance across different stages of patient care.
The findings suggest that analytics investments directed toward more complex clinical processes—such as ICU and acute care settings—generate approximately 75% higher efficiency returns and 93% higher profitability returns compared to less complex workflows. However, these gains take significantly longer to materialize. In routine, standardized processes, analytics tend to deliver faster—but smaller and gradually declining—performance improvements. As a result, hospital leadership should budget timelines and evaluation metrics based on the complexity of the targeted clinical process.
Action Items for Industry
- Prioritize high-complexity workflows: Direct analytics funding toward intensive care, surgical coordination, and cross-departmental processes where long-term gains appear strongest.
- Plan for delayed payoffs: Build multi-year ROI expectations for complex clinical areas rather than judging performance based on short-term metrics.
- Capture early wins strategically: Use analytics in routine or diagnostic workflows to generate quicker—but likely smaller—efficiency improvements.
- Align capital budgeting timelines: Structure funding models to account for slower realization of benefits in high-interdependency environments.
- Monitor trajectory, not just impact: Evaluate whether analytics effects are accelerating or plateauing over time when assessing investment success.
Quotes from the Researchers
"Decision makers who rely on short-term evaluation windows when investing in analytics for complex clinical settings risk underestimating their transformative potential. In contrast, when returns from analytics materialize quickly in less complex care settings, leaders may overinterpret these early gains and overinvest in anticipation of similar growth elsewhere. It is therefore critical for decision makers to calibrate their evaluation horizons carefully. Complex environments often require sustained investment, and greater tolerance for delayed returns before meaningful performance improvements emerge, whereas simpler settings may generate quicker but with limited gains."
- Abhijith Anand
"As organizations increase investments in information technologies, boards and executives demand demonstrable returns, yet not all technologies generate value on the same timeline. While operational systems tend to yield quicker payoffs, analytics investments often require longer horizons, making it critical to understand when and where their value will materialize to avoid premature withdrawal."
- Rajiv Kohli
Co-Authors & Affiliations
Magno Queiroz — Florida Atlantic University, College of Business
Rajiv Kohli — William & Mary, Raymond A. Mason School of Business
Link to the Original Research
Published in MIS Quarterly, available here.
📩 Interested in learning more? If you’d like additional information about this research or to connect directly with the researchers, please email us at research@walton.uark.edu.
