How IT Investments Help Hospitals Gain and Sustain Reputation in the Media: The Role of Signaling and Framing

How can information technology (IT) help hospitals gain and sustain reputation in the media? Combining signaling theory and technology frames, we examine if, how, and to what extent IT investments over time shape three facets of reputation: generalized favorability, being known, and being known for something. In accessing healthcare services, most patients are unable to assess a hospital’s quality of care directly. Faced with such information asymmetries, patients tend to consider a hospital’s reputation in the media when making care decisions. Indeed, journalists are well positioned to detect even the weaker quality signals—among which are state-of-the-art IT—that a hospital emits. As information intermediaries, journalists aggregate and interpret IT-related signals against the backdrop of their technology frames, which reflect their expectations of how a modern hospital IT should look. Perceived congruence between their IT-related expectations and observations on the ground is likely to translate into less critical writing about a hospital. We test our theorizing based on a comprehensive panel data set of 152 English hospital organizations spanning five consecutive years of IT investments and subsequent changes in media reputation as reflected in 175,973 articles in English newspapers. We find that investments in IT staff increase the “being known” facet of reputation as evidenced in the volume of media coverage. Investments in IT equipment, in contrast, positively affect a hospital’s general favorability as mirrored in the tenor of its media coverage. Our econometric analysis as well as our complementary content analysis of newspaper articles and follow up interviews with journalists allow us to attribute this effect primarily to more visible IT equipment investments that prompt journalists to write less negatively about a hospital. These findings suggest that investments in IT equipment can buffer hospitals from negative press, thereby helping them to gain and maintain a strong reputation in the media.