Week12_Menon and Kohli (2013)_Ada

Blunting Damocles’ Sword: A Longitudinal Model of Healthcare IT Impact on Malpractice Insurance Premium and Quality of Patient Care

Motivation:

Prior studies on the business value of information technology (IT) mainly focus on the impact of IT investments

on productivity and firm profitability. Few have considered its implication on expected and actual

product or service quality. This paper fills this gap.

Research Question:

This study investigates the impact of past healthcare IT (HIT) expenditure on the malpractice insurance premium (MIP) and the moderating effect of past HIT expenditure on the relationship bet theyen past MIP and current quality of patient care.

Conclusion:

By examining hospitals’ IT spending and performance, they found evidence of a direct impact of HIT on MIP as well as on the quality of patient care. The evidence of lower readmissions and mortalities in association with past HIT expenditure validates Hypothesis H1 regarding the direction of impact of HIT on quality of patient care. The hypothesis was supported by the argument that IT is able to provide appropriate alerts during patient care. Readily available patient information facilitates good quality medical care, and coordination between staff members administering medical care is facilitated by HIT, leading to fewer errors in patient care. Although this result is consistent with conclusions in prior studies, the significance of the coefficients of past MIP in both models of patient care quality indicates that prior research had not satisfactorily accounted for ex ante risk. Thus, Hypothesis H3 contributes to healthcare literature by providing an explanation for the inconsistency among the findings of prior research.