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

Author List: Kohli, Rajiv;
Information Systems Research, 2013, Volume 24, Issue 4, Page 918-932.
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 by investigating 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 between past MIP and current quality of patient care in a longitudinal model. Based on archival panel data on costs, operations, and patient care outcomes of 66 hospitals in the U.S. state of Washington from 1998 to 2007, we find that past HIT expenditure is negatively associated with MIP, supporting our argument that HIT provides value that is anticipated by insurers and is captured by a change in MIP. We find that past HIT is positively associated with quality of patient care. We also find that past MIP is positively associated with quality of patient care, supporting the premise that hospitals respond to MIP by making risk mitigation efforts. However, we find that past HIT moderates this relationship negatively, suggesting a reliance on HIT at the expense of risk mitigation.
Keywords: business value of IT;organizational risk;hospital;dynamic panel model
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#196 0.260 health healthcare medical care patient patients hospital hospitals hit health-care telemedicine systems records clinical practices physician electronic physicians longitudinal outcomes
#161 0.204 role relationship positively light important understanding related moderating frequency intensity play stronger shed contribution past considered maintenance effort effect specifically
#148 0.099 productivity information technology data production investment output investments impact returns using labor value research results evidence spillovers industries analysis gains
#223 0.090 insurance companies growth portfolios intensity company life portfolio industry newly vulnerable terms composition operating implemented factors asset focus disaggregation choices
#115 0.077 quality different servqual service high-quality difference used quantity importance use measure framework impact assurance better include means van dimensions assessing
#271 0.075 technology investments investment information firm firms profitability value performance impact data higher evidence diversification industry payoff return findings decisions greater
#264 0.061 risk risks management associated managing financial appropriate losses expected future literature reduce loss approach alternative mitigate failures failure cause mitigation