Our study focuses on the adoption and use of hospital information systems and their impact on the quality and cost associated with delivery of patient care. Archival data on hospital IT usage obtained from the Dorenfest Institute is combined with archival data on the quality of hospital care processes from the U.S. Department of Health and Human Services to conduct a three-year longitudinal study of a balanced panel data set consisting of 2,848 U.S. hospitals. Our analyses extends earlier research on the association between healthcare IT usage and efficiency improvements in healthcare organizations that have primarily focused on outcomes associated with operating cost reduction. Preliminary results from our study indicate a positive impact of clinical information systems, patient scheduling applications, and human resource management information systems on the quality of health care processes. However, quality increase comes at a cost as clinical systems usage and patient scheduling system usage increase hospital operating expenses.