Week 12 Reading Summary – Menon and Kohli (2013) – Xi Wu

Menon, N. M., & Kohli, R. (2013). Blunting damocles’ sword: A longitudinal model of healthcare it impact on malpractice insurance premium and quality of patient care. Information Systems Research, 24(4), 918–932.

Few studies have considered its implication on product or service quality, this study fills the gap by investigate the impact of healthcare IT (HIT) expenditure on the malpractice insurance premium (MIP) and the moderating effect of HIT expenditure on the relationship between MIP and patient care quality. Based on the prior literature of IT value and risk management, three hypotheses are proposed. 1) Past HIT expenditure is positively associated with current quality of patient care. 2) Past HIT expenditure is negatively associated with MIP. 3) Past MIP is positively associated with quality of patient care. 4) The relationship between past MIP and quality of patient care is enhanced (positively moderated) by past HIT expenditure.

There are multiple data sources in this study. Hospital information is from the Washington State Department of Health. Patient care outcomes are obtained from a data services and consulting company. Three regression models are applied. To control for the likely persistence in organizational decisions and actions from year to year, lag of dependent variables is added. First-differencing method is applied to address the fixed effect factors. Some instrument variables are used to overcome the endogeneity problem. Results support all the hypothesis but H4. The moderating impact of HIT on quality of patient care through its impact on the link from past MIP to quality of patient care is negative. The findings offer opportunities for future research.

This study contributes to understanding the expectation of IT benefits and its effect on an organization. It also informs decision makers in risk, quality management, and the IT function to engage in joint risk mitigation decisions to achieve desired organizational goals.