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In this study, we examine the effect of health information technology (HIT) investments on hospital bad debt via improved patient experience. Using data from California Hospital Reports and Definitive Healthcare, we first expect and find that HIT investments decrease hospital bad debt. Next, following Baron and Kenny's (1986) approach and the bootstrap approach of Zhao, Lynch, and Chen (2010), we study whether patient experience mediates the relationship between HIT investments and hospital bad debt. We find that HIT improves patient experience which, in turn, reduces bad debt at hospitals. Taken together, our findings provide evidence that patient experience is important as a means to affect the relationship between HIT investments and hospital bad debt.

Health Information Technology Investments, Patient Experience, and Hospital Bad Debt