
The healthcare industry continues to face chronic challenges of rising costs and increased workload for healthcare workers (Kohli & Kettinger, 2004; Porter & Teisberg, 2006). Healthcare information technologies (“HIT”) are often touted as one of the solutions to these problems. While some studies on healthcare and HIT have found that IT investments and use, in general, have led to lower medical errors, mortality rates, and increased financial performance (Amarasingham, Plantinga, Diener-West, Gaskin, & Powe, 2009; S. Devaraj & Kohli, 2000, 2003; Kohli & Kettinger, 2004; Porter & Teisberg, 2006), these positive HIT impact findings are not consistently true as other studies have highlighted cases of HIT issues and failures. Part of this confusion and equivocality of HIT impact findings is due to the fact that many HIT studies were based on cross-sectional data and were ambiguous regarding the type of HIT they were studying (Agarwal, Gao, DesRoches, & Jha, 2010). Others point to the complications in measuring the benefits of HIT as healthcare work is highly complex (Cuellar & Gertler, 2005; Davidson & Chiasson, 2005; Leviss, 2010). Put together, even as HIT impact research continues to evolve, more research is needed to explain how HIT use could help manage healthcare’s rising costs and improve productivity. Early research on IT impacts has identified how IT (in general) could directly change the level of output, usually at the aggregate level, so as to bring about improved organization performance (Hitt & Brynjolfsson, 1996; Hitt, Wu, & Zhou, 2002). Following from this stream of research, most HIT impact studies have focused on the direct productivity impacts of HIT. However, this direct approach is problematic as studies of HIT use have found that many aspects of healthcare work are hard to enhance and automate since this type of work requires ongoing human interactions (Berg, 1998; Davidson & Chismar, 2007). Furthermore, it is common for healthcare medical personnel to put in long hours at work, thus any possible gains in productivity may be less likely to be derived from working harder.
Recent research, especially in the use of telemedicine, has shown that HIT use may indirectly impact work processes and improve healthcare processes (Hui, Woo, Hjelm, Zhang, & Tsui, 2001; Singh, Mathiassen, Stachura, & Astapova, 2011). Building on a small but growing stream of IS research that provides an enhanced and holistic understanding of HIT value (Sarv Devaraj & Kohli, 2002; S. Devaraj, Ow, & Kohli, 2013; Nirup M Menon, Yaylacicegi, & Cezar, 2009), our research study focuses on how specific HIT—telemedicine—impacts healthcare processes and how that, in turn, leads to improved organizational outcomes. In this study, we used the concept of input allocative efficiency and the Theory of Swift and Even Flow (“TSEF”) perspective to explicate how HIT may affect relevant healthcare outcomes.
Our study analyzed the impact of telemedicine use on patient, physician, and healthcare process outputs in a geriatric department of an acute-care hospital. We evaluated the effect of telemedicine on the input allocative efficiency of healthcare process through the re-allocation of organizational resources and assessed whether gains in allocative efficiency resulted in improvements in organizational outcomes. Input allocative efficiency (or in short allocative efficiency) refers to the choice of inputs (resources) mix to produce the outputs while minimizing production cost (Kumbhakar & Lovell, 2000; N.M. Menon, Lee, & Eldenburg, 2000). The allocative efficiency approach allows us to understand how HIT use could improve the assignment of resources to different tasks for efficiency gains (Leibenstein, 1966; N.M. Menon & Lee, 2000; N.M. Menon et al., 2000). In our study, we chose to focus on the impacts of applying a telemedicine system to the geriatric care process. We conducted a longitudinal field study that combined interview, archival, observation and survey data to measure the performance before and after the implementation and use of a telemedicine system in the geriatric specialist clinic.
Our study found that the use of telemedicine and the process changes that accompanied the system had overall positive impact on allocative efficiency for some processes. We observed that applying telemedicine with business process redesign enabled greater visibility of the patient information resulting in patients (tasks) being better assigned to the appropriate physicians (resources). Further, using TSEF principles, we show that the improved allocative efficiency achieved through the new telemedicine process or clinical pathway reduced variance of patient wait-time in the specialist clinic and provided better care to nursing home patients. By tracing the process and mechanisms through which HIT indirectly impact on organizational outcomes via the reallocation of resources and tasks, our study potentially “enhances our understanding of the various positive manifestations of IT” by providing a more holistic perspective of HIT value (Kohli & Grover, 2008 p. 33).