Different Conceptual Approaches to Understand Health Care Information Systems Reima Suomia & Jarmo Tähkäpääb & Johanna Holmc c
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[email protected] Turku School of Economics and Business Administrationa,b,c Institute of Information Systems Science P.O. Box 110, FIN 20521 Turku, Finland Tel. +358-2-338 311, Fax +358-2-3383 451
Abstract The idea of this article is to build taxonomy of different approaches to conceptualize, understand and assess health care information systems. Our analysis starts from a very practical need: we are involved in the assessment of a big information systems project in the health care system, which has several stakeholders. Each of them seems to have different goals for the system, and value different issues in the assessment. On the scientific front, several approaches to strategic management are available, and one has to choose a limited set of “eyeglasses” to observe the system under assessment. Based on these starting points, we decided to develop taxonomy of the strategic planning approaches available. For each of them, we discuss the issues they highlight and hide, and assess their strengths and shortcomings. To support this discussion, in the beginning of the article we discuss the reasons for “informatiozation” in the industry, and present a tentative classification of information systems in the field. Our conclusion is that the approaches should not be seen as purely competitive ones, but as complementing each other. However, we warn that the industry is too much inclined towards the process management point of view, and too concentrated on the outsourcing discussion. A value discussion on the core competencies of the industry should be held, and the role of information and knowledge as central core competencies rehabilitated.
Keywords: “health care information systems”, “information systems assessment”, “information systems evaluation”, “strategic management approaches”.
1. Introduction It is not exaggeration to say that activity in the field of health care information systems has boomed during the last five year. In our view, the following conditions have accounted for this boom and make studies about information systems in the health care sector a worthwhile task: Proceedings of IRIS 23. Laboratorium for Interaction Technology, University of Trollhättan Uddevalla, 2000. L. Svensson, U. Snis, C. Sørensen, H. Fägerlind, T. Lindroth, M. Magnusson, C. Östlund (eds.)
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Starting from “scratch” has made a fast development in the field possible as it comes to modern information and communication technology (ICT) • Developments have been very fast: on the other hand demand for information and ICT has too grown enormously • ICT has been a total change agent for the industry, and a needed one • Fast introduction of modern ICT has been made possible through the simultaneous introduction of many modern management techniques such as quality assurance • Internet was and is the “killer platform” in this industry too • The whole sector has turned from a handicraft industry to knowledge industry. The cumulative amount of knowledge about human, the most complicated mechanism in the world, is immense. No one can completely master it and methods for sharing and exchanging information are badly needed. Information technology, and especially the Internet, has opened up new avenues for this activity. On the same time, the possibilities to produce new medical information have increased very much because of modern information technology. Vast data masses can effectively be stored, analyzed and modeled with modern information technology. If we still add to the developments a possibility to interact with the patient in completely new dimensions because of information technology, say for example through better customer (patient) information management and telemedicine, some of the components in the wheel of ISbased health care industry informatization (Figure 1) become apparent.
Efficient ways to produce medical information
Efficient ways to share and communicate information
Efficient ways to communicate with the patient Figure 1. The wheel of IS-based health cares industry informatization The industry can be seen as a young pride: very untouched but still anxious to know more about information technology and its application. One might conclude that the industry sector would have needed changes even without information technology, but that its improvements have given a good boost even for other changes. The industry is undergoing rapid changes, and in such an environment mistakes can be made and opportunities may be lost. For that purpose, general management strategies have to be strong ones and well-based on scientific knowledge, and especially so in the case of the principal change agent, information systems. Our research problem for this article is: which kinds of conceptual approaches can we find for strategic management in health care, and especially for the strategic management of information systems, and which are the strengths and shortcomings of each approach? To introduce the reader to the issue, we already in this introduction motivated
how the industry is changing because of modern information technology, and which kinds of challenges are introduced. In the next chapter we present a tentative classification of information systems in the health care sector. Chapter 3 presents the selected approaches, and in chapter 4 we discuss their suitability to the health care industry. Finally, in chapter 5 conclusions follow. Our approach is a conceptual one, but performed to support several empirical research projects in the field, partly already enjoying the empirical findings from those projects.
2. Health care information systems - what are they? Health care sector is one of the few areas where information technology is not exploited as much as it would have been possible. Traditionally information technology in this area has mainly been created for the design of the technical instruments and for the use of better care and treatments. Administrative and economical issues have not been in the interest for the systems development. However, even how important the technology is in creating better clinical instruments for better and more effective patient care, also the economical issues and how the continuously growing flow of patients can be controlled, have grown in the importance when health care organizations are developing their information technology. (Tähkäpää, Turunen, Kangas 1999). Classifications of ICT techniques in the Health Care sector are few. We propose the classification as shown in Figure 2. The heart of our classification is in the interaction between the medical personnel and the patient. Both the systems that support discussions in the interaction situation: these we call the customer support and consultation tools. These tools become active, as a relationship between the patient and care-taking personnel has been established. Customers, the patients, as well as the medical staff have however the interaction needs to be established, timed and synchronized, and for these purposes we introduce the systems of interaction support tools and process support tools.
Decision support provision
Customer support tools
Consultation tools (front-end) Interaction support tools
Process support tools Money related support tools
Figure 2.
Preparation tools (back office)
Management tools
Classification of ICT tools in Health Care
Interaction-related support tools address the situation from the viewpoints of the primary actors, patients and care-taking personnel, whereas process support tools take the viewpoint of the total value chain. Finally, the transactions have to be financially tracked, and for that purpose introduce the category of money-related support tools. Medical care is very knowledge-intensive, and an important category of systems falls into the category of decision support provision. With this name we focus on the knowledge needs of each individual care-taking action, but of course knowledge is being produced and used in other connections too. We feel that the distinction used in services, that of front-end and back-office systems is usable in Health Care sector too. Preparation tools support the customer - care-taking personnel interaction, but is not active in the actual transaction. Finally, we have a category of management tools for the Health Care sector. In our classification, they are active at a general level, and not used in an individual consultation situation. Most likely they are of the same character as in any management activity. All the components of this ICT infrastructure interact with each other, some more intensively, some hardly at all. However, as we are not able to go very deep into that topic in this article, we leave the presentation of the connections between the components out from the figure.
3. The selected approaches For the analysis purposes, we differentiate between eight different conceptual approaches to strategic planning of information systems. The list is not and can not be exhaustive, but includes in our vision the trendiest approaches. The approaches are explained based on some common definition and without any specific attention to the information systems although also them are in discussed. The aim is to give an overall picture what these concepts include and in the chapter 4 to discuss closer their suitability to the health care sector information systems: 1. Stake-holder analysis 2. Cost-benefit analysis 3. Competitive advantage search 4. Resource-based approach 5. Knowledge-management approach 6. Organizational learning 7. Process analysis 8. Sourcing analysis A detailed analysis of the approaches follows, and is summarized in Table 1 (Appendix 1)
3.1. Stakeholder Analysis Stakeholders are groups and individuals that can affect, or are affected by, the achievement of the organization’s purpose. Without the support of stakeholders, and organization would cease to exist (Freeman, 1984). Owners, employees, customers, suppliers, government, community, media, unions, consumer groups, and environmental groups are all representatives of typical stakeholders. It is the role of the management to interpret the stakeholders’ world, and then to
direct the everyday activities of the company in such a way that the balance between each stakeholder and the company is preserved. If the relationships among stakeholders become unbalanced, the survival of the firm is in jeopardy (Yläranta, 1999). The classical debate between stakeholder theory and neoclassical theory of the firm is, whether the firm should have responsibilities toward other stakeholders than owners or not. According to neoclassical theory, firm’s sole and only interest should be profit maximization, i.e. maximization of stakeholders’ wealth. The stakeholder theory states that the firm also has responsibilities toward other stakeholders such as customers, personnel, financiers and community. Matikainen (1994) maintains that the responsibilities toward stakeholders exist basically because of two reasons – as means for higher goals (efficiency argument) or as ends in itself (moral argument). The efficiency argument states that stakeholder interests are taken into account as means for higher level goals (profit maximization, survival or growth). If those interests are neglected, the stakeholders tend to allocate their resources to alternatives thus threatening the survival of the firm. (Matikainen, 1994). The moral argument states that corporations, given their size and economic power, have a moral obligation that extends beyond its shareholders to society at large. It is argued that there are no moral grounds on which stockholders interests can be given priority over the interests of other stakeholders. From this perspective, the corporation should seek maximization of social benefit and actively consider the interests of the environment, employees, suppliers, etc. (Matikainen, 1994). In many cases increasing the satisfaction of one group of stakeholders decreases the satisfaction of others. Managers must work to find that point where most of the stakeholders are satisfied most of the time. (Dolan, 1998).
3.2. Cost-Benefit Analysis A cost-benefit analysis (CBA) is the analysis of an opportunity to demonstrate the benefits in cost saving in order to receive management commitment and support to implement. Today CBA is being used for a wide range of opportunities, which are no longer limited to the purchase of high priced equipment. Generally, the change in business climate over the past years has resulted in an increased focus on an organization’s bottom-line. This has affected business decision making, requiring CBA to be utilized for all major purchases, expansions, organizational changes, etc. It is recommended that CBA should be approached as a multiple step process, beginning with a preliminary survey, which is followed by a feasibility study. Together the steps provide the necessary information to execute a CBA report. (Village and April, 1997). Every rational economic agent faces the problem of seeking solutions, which enable him to maximize his net benefits. To this purpose, in order to determine whether or not it is advantageous to adopt a particular choice, he tries to define and to quantify its possible effects. What differentiates private analysis (financial appraisal) from public analysis (economic or social appraisal, or what we call cost-benefit analysis) is that the latter adopts a social perspective. In this perspective CBA is the tool of applied welfare economics, which connects the decision to perform an action with its effects, in terms of benefits and costs to all the members of a community. (Battiato, 1993). There is a wide range of non-market items, which can be valued in one way or another.
Nevertheless, there are goods for which no meaningful valuation can be made, especially pure public goods, which can jointly benefit many people and where it is difficult to exclude people from the benefits. Whenever cost-benefit analysis becomes impossible, since the benefits cannot be valued, it is still useful to compare the costs of providing the same beneficial outcome in different ways. This is called cost-effectiveness analysis and is regularly used in defense, public health and other fields. (Layard and Gaister, 1994).
3.3. Competitive Advantage Unique knowledge of firm is major factor when it is creating competitive advantage. One of the most widely known examples of seeking competitive advantage and a means to define unique knowledge, is SWOT-analysis. (Spender, 1996). Early research in searching competitive advantage from information systems is based mostly on Porter frameworks. (Porter, 1980) It was suggested that information technology can be used to create barriers for new entry, increase switching costs, change the basis of competition, lower bargaining power of suppliers and create new products or business. (Turunen, Salmela and Kämäräinen ,1999). Later arose some other factors, which changed meaning of the information systems as a means of gaining competitive advantage. Risks of changing the competitive rules started to become more visible and analysing competitors resources and capabilities were essential. Also sustainability of achieved competitive advantage, when copying the technology became easier and cheaper was critical. It was stated that the importance of using company’s unique assets and resources combined with information technology was essential. Behind this view were two strong assertions: first that the resources and capabilities possessed by competing firms may differ and second that those differences may last long. (Turunen, Salmela and Kämäräinen, 1999). Pfeffer (1994) emphasises the importance of people and how they are managed. He sees that individual is becoming more important source of competitive success because many other, previously important sources have lost their power. Traditional sources of success, like product and process technology, protected or regulated markets, access to financial resources and economies of scale can still provide competitive leverage although in lesser degree than earlier. That’s why organisational culture and capabilities derived from how people are managed have become more vital. (Pfeffer, 1994).
3.4. Resource Based Approach The resource-based theory assumes that a firm’s competitive advantage lies in the bundles of service-creating resources that can be exploited, rather than in the product market combinations chosen for the deployment of these resources. According to Penrose (1959) a resource can be viewed as a source for providing an array of services for the clientele of the company. Resources are usually obtainable in discrete amounts. Barney (1991a) defines a firm’s resources as including all assets, capabilities, organizational processes, firm attributes, information, and knowledge that enable the firm to conceive of and implement strategies that improve its efficiency and effectiveness. He classifies them into three categories: physical capital resources, human capital resources and organizational capital resources. According to Kangas (1999) the resource-based view takes the value chain logic
(Porter, 1985) a step further by examining the attributes that resources identified by value chain analysis must posses in order to be sources of sustained competitive advantage. Barney (1991a) described the following four indicators of a firm’s resources that generate sustained competitive advantage: • Value: Can the firm’s resources respond to environmental opportunities and/or threats? • Rareness: How many competing firms already possess these valuable resources? • Imitability: Are these resources costly to imitate? • Supportive organizational arrangements: Do organizational arrangements support and exploit resources? 3.4.1.
Organizational Competencies and Capabilities
Organizational competencies refer to the unique knowledge owned by the firm. Firms are presumed to focus on a few key or core competencies, which they can exploit effectively to their competitive advantage. Organizational capabilities refer to the firm’s ability to use its competencies. They represent the collective tacit knowledge of the firm in responding to its environment. Capabilities are developed by combining and using resources with the aid of organizational routines, i.e., those specific ways of doing what the organization has developed and learned (Kangas, 1999). According to Andreu and Ciborra (1996) core capabilities are those that differentiate a company strategically in term of beneficial behaviors that will not be observed in its competitors. Such capabilities evolve from the competitive environment and business missions of the firm through “capability learning loop”. So what is the role of information technology in this context? Barney (1991), for instance, questions the claim that information systems are a source of sustained competitive advantage. As such, any strategy that exploits just the machines (computers) in themselves is likely to be imitable and thus not a source of sustained competitive advantage. Andreu and Ciborra (1996) suggest four guidelines if IT is to play a key role in making core competencies and capabilities really count for a firm: • Look out for IT applications that help to make capabilities rare. • Concentrate on IT applications that make capabilities valuable. • Identify capabilities that are difficult to imitate. • Concentrate on IT applications with no clear strategically equivalent substitutes.
3.5. Knowledge Management The discipline of knowledge management is little more than 10 years old. Knowledge management deals with the process of creating value from organization’s intangible assets. It’s an amalgamation of concepts borrowed from the artificial intelligence/knowledge-based systems, software engineering, BRP, human resource management, and organizational behavior fields. (Liebowitz, 1999). According to Higgins (2000) knowledge management is the combining of technology and human judgment to understand and improve how the organization creates, saves, and uses its awareness of how to do things. Knowledge management includes database management and the creation and documentation of how things are done in the organization. Elliot and O’Dell (1999) maintain that knowledge is information in action. They refer to Potanyri and Nonaka and state that knowledge comes in two basic varieties, tacit and explicit. Explicit knowledge comes from books, documents, white papers databases and policy
manuals. Tacit knowledge is contained in people’s minds and includes general information, experiences and memories. Knowledge management encompasses both types of knowledge. Here are some other definitions of knowledge management: • Knowledge management is the systematic, explicit, and deliberate building, renewal and application of knowledge to maximize and enterprise’s knowledge-related effectiveness and returns from its knowledge assets. (Wiig,1997) • Knowledge management is the process of capturing a company’s collective expertise wherever it resides – in databases, on paper, or in people’s heads – and distributing it to wherever it can help produce the biggest payoff. (Hibbard, 1997). • Knowledge management involves the identification and analysis of available and required knowledge, and the subsequent planning and control of actions to develop knowledge assets so as to fulfil organization objectives. (Macintosh, 1996). A variety of technologies can make up a knowledge-management system; intranets, data warehousing, decision-support tools and groupware are just a few. Hibbard (1997) maintains that driving the sudden interest in knowledge management are two main factors: the explosive growth of information resources such as the Internet, and the accelerating pace of technological change. Technology is not, however, the only component. According to Drew (1999) the key components of successful knowledge management are strategy, culture, technology and people. Also Hibbard (1997) states that technology plays a very vital role in knowledge management, but technology on its own cannot make knowledge management happen. Knowing which technologies to select and how to deploy them begins with an understanding of just what knowledge management is.
3.6. Organisational learning There is a wide range of different descriptions and constructs about organisational learning among researchers. The definitions include such issues as: encoding and modifying routines, acquiring knowledge useful to the organisation, increasing the organisational capacity to take productive action, interpretation and sense-making, developing knowledge about actionoutcome relationships and detection and correction of errors. Some of the definitions involve individual human actors while others take place in the organisational level of analysis. Another distinction comes from the research objective: some researches study how organisation learns while others concentrate how individuals embedded in organisation learn. (Edmondson, Moingeon, 1996). There are five components which can be described and which are essential to the learning organisations: systems thinking, personal mastery, mental models, building shared vision and team learning. These five disciplines, means a body of theory and technique that must be studied and mastered to be put into practise. It is a developmental path for acquiring certain personal skills or competencies. Disciplines are not similar to the management disciplines like accounting but they concern how individual think, what he truly wants and how we interact and learn with one another. Disciplines should be developed as a whole, so that they create a new tool for organisation. This demand leads to a conclusion that the systems thinking as a fifth discipline. It is a conceptual framework, which enables us to see and integrate the five disciplines into the coherent body of theory and practice in long-term. (Senge, 1994). Kim (1993) is discussing about how individual learning can advance organisational learning and pointing out the link between those two. He creates an integrated model, OADI-
SMM-model: observe, assess, design, implement – shared mental models. The model addresses the issue of learning through the exchange of individual and shared mental models. The individual mental model is in essential role in the model and Kim is looking for answers how these mental models explicit and how they can be transferred into the organisational memory. (Kim, 1993). Crossan, Lane and White (1999) have created an organisational learning framework (4I framework). There are four related processes: intuiting, interpreting, integrating and institutionalising. Under these processes there are three learning levels: individual, group and organisation. The levels define the structure through which organisational learning takes place and are linked together with the four processes. Ideas occur to the individuals who share those ideas through integrating processes and after going through social processes and group dynamics those ideas may facilitate or inhibit organisational learning. (Crossan, Lane, White, 1999)
3.7. Process Analysis Instead of viewing business in terms of functions, divisions or products it can be viewed as a process. Process can be defined as a structured, measured set of activities designed to produce specific output for a particular customer market. Process implies a strong emphasis on how work is done within organization, in contrast to a product focus’s emphasis on what. There is also a heavy emphasis on improving how work is done in contrast to a focus on which specific products or services are delivered to customers. (Davenport, 1994). When using the process approach the organization usually aims to produce value for its customer. Therefore an important measure of a process is customer satisfaction with the output of the process. To ensure that the customer needs are met and that design an execution is in somebody’s response a process needs a clearly defined owner. (Davenport, 1994). Another definition that emphasizes customer role in process says that process is a collection of activities that uses different kind of inputs and creates an output that is of value to the customer. (Hammer and Champy, 1993). There is also a definition where the process is divided into three types: core, support and management. Core processes concentrate on satisfying external customers, support processes concentrate on satisfying internal customer and management process concern themselves with managing the core or the support process, or planning the business level. (Ould, 1995) There are several important themes and questions in the literature defining what business process definition can include. Here are some examples: is business process changed by gradual or with radical changes (improvement or innovation); how many levels are there in process (process, subprocesses, tasks etc.); core or essential process (several core processes can be described in the organizations); the amount of processes in organization etc. (Darnton and Darnton, 1997)
3.8. Sourcing Analysis It is intuitively apparent that different sources of IT provision, together with different contractual focuses and different purchaser/supplier relationships will be appropriate according to individual circumstances. Sourcing of IT is essentially a “make or buy” decision. (Finlay and King 1998). From the in-house information management point of view an acquisition encompasses
understanding and use of the external IS/IT services market. Particularly critical are decision on what to outsource and insource, and which external suppliers to use. The source dimension describes the origin of a particular information resource acquired by an organization. This dimension may be thought of as a continuum anchored by market at the one end and hierarchy at the other. This terminology, derived from transaction cost economics, reflects the fact that organizations may construct/acquire information systems either using resources internal to the organization or resources supplied by external providers. Most are acquired using some combination of internal and external sources. (Hyytiäinen, 1998). Researchers have suggested several reasons why firms outsource their IS. These key drivers include financial reasons, such as reducing costs, generating cash, and replacing capital outlays with periodic payments. Firms also outsource IS to simplify the management agenda and focus on their core competencies. Technical reasons for outsourcing, such as improving the quality of IS, gaining access to new talent and technology, and the easy availability of vendors with expertise and economies of scale have also been proposed. “Political” reasons for outsourcing include dissatisfaction with the IS department and the chief information officer, viewing IS as a support function, pressure from vendors, and a desire to follow a trend that has received wide coverage in popular press. (Smith et al. 1998). The conventional guideline is that all new and strategically important tasks should be performed internally. According to Reponen (1993) organizations should consider a combination of different alternatives along the spectrum of total outsourcing or insourcing. Organizational decisions should be made consciously and they should be based on the company’s IS strategy.
4. Which approach and when In the health care area the traditional approaches for strategic planning and management are in very different environment than in business sector so far. This is true especially in environments and countries where health care is mainly maintained by public services as it is in Finland. However, for different reasons the emphasises in the public health care is also beginning to remind more and more private sector, where the management theories have been one of the key issues already for a long time. The changes in the health care area like increased cost awareness, expectations for increased competition and effectiveness demands brings public health care closer to the private sector. But despite these similarities health care is and will always stay as a different environment where most of the management theories have to be reevaluated. In this chapter we try to place the approaches from previous chapter to the health care environment and discuss how well they can be adopted there and also their roles in the information systems development.
4.1. Stakeholder analysis The neo-classical theory of the firm is traditionally emphasising the role of the owners and their profits and how the company can maximise them. For the public health care area this thinking suites poorly. Even though there are also owners in public health care (municipals) they don’t have the interest of getting maximum profit - actually they don’t expect profit at all. But also the interest of public owner to follow the cost of the service production has grown as well as the
need to produce them as effectively as possible. So, though the owners don’t invest their money elsewhere in better profit expectations if the organisations are not profitable like in private sector, they are expecting profits in a form of savings and better care results. But according stakeholder theory stakeholders can be identified also in more extensive way. This is also more appropriate for the health care environment. According to Kumar and Subramanian (1998), in health care five most important and powerful stakeholders can be identified. They base this argument on a recent study of hospital executives. These five stakeholders are: medical staff, patients, hospital management, professional staff, and boards and trustees. The medical staff’s expectations are primarily related to high clinical quality and adequate support services. Patients care about clinical quality, but they are also concerned about service quality and low costs. The expectations of hospital management include cost containment, profitability, and institutional leadership. The primary concerns of the professional staff are also clinical quality and availability of adequate services and facilities. The board of trustees, which possesses formal control of the hospitals, is interested in profitability, maintaining a steady stream of revenue and cash flow, and effective utilization of resources. In the eyes of the stakeholders in public health care the investments to the information systems have to be effective as in private sector. There exists always an alternative investment, which might bring more value to the organization and would therefore be more profitable meaning that they have to produce better and more effective health services. The pressure comes both from inside and outside of the organization. So the stakeholders as understood above can be the determining factor even though they are not in the owners position.
4.2. Cost-Benefit analysis Cost-benefit analysis in health care information systems environment is a difficult task to conduct. The analysis of costs is basically the same and has same problems as in any other industry. Those are mostly indirect costs like the management activities in IS projects. Also the direct cost and benefits are very often the same in different industry areas. Those could be things like cost of the computers or information network and benefits like goods, or subventions from the government (public sector especially). The problem is how to analyze the indirect benefits, which in the health care is better health. All the investments, including information technology should focus this goal. If we invest a certain amount of money to information technology, which are its effects to patient’s health in the long run? Even more difficult makes the definition that one of the basic roles of the public health care is that it should be able to offer preventive care. How we can measure which factors have effected to better health of the citizens in the long run? This is the problem especially in the public sector in primary health care. The question arises what should we analyze and how far should the cost-benefit analysis go in health care? Development of a method, with which we could analyze exactly what the are the health effects achieved after investing the information system, might probably be endless. Instead we can use the cost-effectiveness analysis (cf. Layard and Gaister, 1994) that can measure how effectively certain product is produced compared if it is produced in some other way. In simplest way we can measure e.g. how long does it take to write patients information to the computer and how easy it is to access them again compared if it would have been written manually. This kind of measures are reasonably easy to develop and are still a good starting point in evaluating the benefits of information system in the area.
There exists almost always an opposition when IT investments are under discussion and the main target for them usually is what are the achieved benefits from investments. It is easy to claim that there has not been any advance in health effects after information systems investments but considerably more difficult to point out the benefits. However, the use of information systems is fairly new in the sector and still in the middle of the heavy progress and the effects will be seen only after the sector have stronger tradition in their exploitation.
4.3. Resource based theory One of the assumptions in the resource-based theory is that firm’s can gain competitive advantage through effective use of different resources inside the firm, which create services for the customers. In health care area the idea of competition has not been strong so far because of the very high public share in service production. So, in health care there has not been much need for the discussion about issues like four resource indicators that generate competitive advantage (see previous chapter) described by Barney (1991a). This has also had its influences to the effectiveness of the work. Though the quality of the care has been high the use of the resources has not been very effective. Barney (1991a) classifies resources into three categories, which are physical capital resources, human capital resources and organizational capital resources. Together with the changing environment in the health care, the increased use of the information systems has influence for all of these resources. The biggest impact focuses into the physical capital in the form of increased technology. Health care has had technology resources in use for a long time in clinical activities like cardiology and laboratory and also in administration but there for external reporting purposes mostly. (Tähkäpää, Turunen, Kangas, 1999). However, to create information for the use for whole organization and to become a real competitive advantage, these two areas of resources must have strong integration. The integration of systems has an effect to the organizational capital. E.g. organizations processes and strategies has to be rearranged so that the integration of information systems can be used in effective way. Changes in both capitals are then expected to have an effect to the human capital in increased training, relationships, experience etc.
4.4. Competitive advantage Although the biggest changes and increase in resources focus to the information technology, it can’t create competitive advantage alone because in many environments and industries technology is usually easy to imitate (cf. Barney, 1991a). This is also the case in health care. The treatments and the equipment’s for conducting the treatments are quite similar in organizations and therefore easy to imitate. Therefore it is difficult to achieve any competitive advantage through them. Only together and with the aid from other two resources (human and organizational) it can create some unique knowledge, which only that firm possesses. Besides the similarities in treatments and equipment’s the problem in the health care, especially in public sector is also, that because of the strict control of the regulations from governmental health care authorities in the area, it is difficult to create any unique knowledge. Organizations can’t specialize on certain treatments or services because they are obligated to offer wide range of services for their citizens. Their starting points for competition is quite poor. On the other hand competition in the public health care has been quite unknown task so
far and one strong reason for that is that the sector wants to keep this protected position. Although there has been a lot of discussion about outsourcing in health care, which could lower the protection, it has so far concentrated mostly on related supportive functions like laundry or food services and nowadays increasingly also information technology. The core functions have been almost untouched. But because of the need to rationalize the health care (Tähkäpää, Turunen, 1999), also those issues have been raised under consideration. If the public health care organizations have to compete with private sector they also have to consider their competitive advantage in new way and maybe have to try to create some unique knowledge. In the case health care area is going to face increased competition, the focus on creating unique knowledge to gain competitive advantage organizations probably have to be in wider area than in technology development. Like Pfeffer (1994) says the importance of people and how they are managed have become ever important and this is completely true in sensitive and intimate area like health care.
4.5. Knowledge management Health care is probably one of the most knowledge intensive and knowledge dependent industry area. As mentioned earlier, human is probably one of the most complicated mechanism in the world and it is generating continuously more information by the health care and for the use of it. The need to control the knowledge systems to enable them to offer right information in the right place at the right time can not be overestimated. When considered the growth of information needed and produced the need for control is even bigger. The knowledge management in health care has been critical task for ages but the means to conduct that have been so far incomplete. Also how to use this huge amount of information effectively to create optimal value and to gain some competitive advantage from it has not been neither clear nor even needed or in consideration in many organizations. One of the main challenges in health care is how to gather the most critical information in to easy accessible place and how to manage it so that only those who have the rights to access it can do that. The question about data security have emerged one of the main issues when patient information is increasingly placed in databases where practically everybody who uses the system has access. Another related area brought by the Internet and other information networks, is how to guarantee the security of networks where the patient information is increasingly transferred between and inside organizations. Another issue is that how to ascertain that the latest patient information is accessible for the clinicians. Especially in large health care organizations it is very common that there are several independent clinical systems with own files (laboratory, physiotherapy etc.) where the information is stored without any integration. To use effectively all this information clinician should have access all those systems, which are very often dispersed to a wide area of e.g. hospital departments. If the information is stored in both some manual and electronic patient information file, no need to say that to keep the file always in real time is impossible task. The patient administration systems, where all the patient information is stored in one place are solutions to most of these problems but it also raises the question about patient information security discussed earlier. However the main target is how to integrate all the information to appropriate place so that it can be managed, exploited and increased effectively to find the technical instruments that can be used to achieve this target. There is also a threat that increased use of technology in
creating, using and storing information leads just to increased amount of information without creating real knowledge from it (Elliott, O’Delt, 1999). This might lead to increased confusion and misuse of information especially in information intensive industry. That’s why knowledge management is in essential position when information systems are developed and their role in industry is considered in a strategic, long-term, perspective.
4.6. Organizational learning When considering the amount of information and the need to create true knowledge through IS, it sets demands also for organizational learning. As knowledge management, also organizational learning is gaining maybe some kind of lack of interest among health care area. The need for learning is maybe realized but the implementation of means to achieve some organizational learning is missing. One reason for this is perhaps that organizations have strict hierarchy where communication through different level is poor. The information systems might be one way to reduce the gap between hierarchy levels and increase learning. E.g. patient information systems are similar to the whole organization and needs co-operation through different level and therefore could advance the learning effect. Effective use of information systems requires that the whole organization have capabilities to use it and is therefore the ideal platform to develop organizational learning also in other areas. In this case we talk about how organization can learn. How organization can use individual to increase its organizational learning as well as how organization can develop individual learning depends much about the culture in the organization. If the culture prefers independent work it is of course more difficult to use individual learning than in the case where the environment is favoring interaction between individuals. Individuals own capabilities to exploit and divide knowledge are also essential. However, because the health care area is highly dependent on individual contribution to the entity the increased use of the information systems requires that individual can use the systems to increase the productivity and quality of his work. Therefore the organization have to develop its capabilities in organizational learning and also to ascertain that individual is adopting this culture too.
4.7. Process Analysis One of the most discussed areas in the health care sector is how the processes in the organization should be developed. The processes have been under the spotlight for two main reasons. First, the cost of producing health care services increased during the last decades considerably. The organizations didn’t pay enough attention to the effectiveness of work and the costs evaded. After the collapse of economics in the beginning of the 90’s the attention also to health care costs increased. The employees were reduced and the work had to conduct by lesser work force and therefore had to be more effective. This led to the second reason for process renewals, which was the increase of information systems. It was very quickly noticed that information systems itself don’t bring any cost savings if the old processes are only transferred to the system. In contrary it makes the processes even more complicated. The processes had to be analyzed and remodeled to achieve advantage from new systems. The processes were formulated in the patient point of view so that the patient could go through an effective care process which information systems could support.
Important issue in processes is how to gather information about patient and store it so that it can be exploited in all care processes. To work effectively the system should be able to gather information about patient during the care processes so that there is ever-cumulative information in the use of health care personal even during patients whole life. There is however differences between patients and their amount of information. To control this in some cases huge amount of information the need for knowledge management together with process analysis is clear.
4.8. Sourcing analysis Another key area discussed in the health care sector is what organizations should outsource? The issues, which are especially in the focus of outsourcing, are the areas, which are not considered, as the core capabilities in the organization and one of those are information systems. There is however a conflict in this thinking. Information and knowledge is considered as one of the most important resource in health care and that makes management of information an important issue. Should the patient information be in the direct control and management of the health care organization so that its use is assured? So the care and treatment are highly based on information gained from information systems but despite that information systems are not considered as a core capability. One of the reason for this is, that health care organizations have started to adopt information systems quite lately and there has not yet cumulated expertise and traditions to manage them. The lack of expertise has resulted that information systems have developed as difficult, complex and expensive entities to control and therefore the trend is towards outsourcing. Information systems are therefore seen in health care as a supportive role, which is not necessarily a desirable direction of thinking. Especially in small organizations where somebody handles the management of information systems without enough time and professionals skills to conduct the work the system becomes very fast impossible to maintain. In this case the development of information management strategy might help to organize the management more effective and to focus resources more appropriately to information systems. Another possible solution for small organization to keep information systems internal is co-operation with other similar organizations.
5. Conclusions Health care industry is a strong, even though fragmented, industry sector. It has deep cultural and management values based on medical education and professional groups based on professional status. From this point of view, assuming that there is a maximum set of values each organization can carry, one could conclude that other aspects of management are underdeveloped, such as general strategic thinking or management of information systems. Starting from this, we developed in this article eight different conceptual frameworks, that could cast light on the management practices of health care organizations in general, and on there IS management in particular. Each of the frameworks or approaches has its strengths and weaknesses, and no particular approach can be said to be superior over others. The approaches are rather complementary to each other.
From our empirical research, we have concluded that two approaches are trendier among practitioners than the others. They are the process analysis and sourcing analysis approaches. Process analysis is important if you want to computerize current practices. One can even say that without understanding and documenting current processes, you can not start implementing them on the information system. Many IS projects in the health care field are greenfield projects starting from scratch, and a basic process analysis has to be conducted. In some cases, the process is already further and different versions and improvements of current processes already emerge. Process analysis puts stress on the fluent flow of material, also patients, through the production system. Here one can of course question whether this approach having its roots in the manufacturing industry handling with physical objects offers a right metaphor for handling with humans. For supporting initial patient handling procedures installed in information system the approach might work well, but does not at all support the need for comprehensive and deep collection of data about the patients. In this respect, the knowledge management approach is a very much needed complementary approach to the process analysis approach. Sourcing decisions have to be made all the time in health care. We see two big trends making sourcing decisions increasingly important. First, the scope and scale of medical treatment is growing all the time, and no organizational unit, how big ever, can master all the needed care components, or at least not in an economical way. Services have to be bought from experts. The second reason is the constant discussion about and trend towards privatization of services. As public health care activities are outsourced, theoretical support for this is too needed. In this approach information management activities are usually among the first ones to be outsourced. We are not fully sure that this trajectory, meaning that information management is not a core competence for health care organizations, is a right one. Our empirical findings show that health care sector managers, and the political decision makers above them at municipality and state level make far-reaching decisions about the organization of health care and its information management functions without any strategic thinking and direction behind them. Rather, focus is on the short-range cost savings and service level improvements, without thinking about the long-time survival of the health care industry. Our other, less used approaches such as the competitive advantage approach, the resourcebased approach, the organizational learning approach and the knowledge management approach focus more on long- or middle-range improvements and survival of the industry on the long run. We strongly fear that if information systems and knowledge are not understood in the health care industry as sources of competitive advantage, parts of most important resources and competence, and a stimulus for organizational learning, but merely as costs to be outsourced and supporters of basis routine operations, the industry is going to be head towards decline.
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Different Conceptual Approaches to Understand Health Care Information Systems: Appendix 1 Reima Suomi, Jarmo Tähkäpää, Johanna Holm Approach
Primary unit of analysis
Issues highlighted
Stake-holder analysis
Stakeholders of the IS
Cost-benefit analysis
Issues hidden
APPENDIX 1 Strenghts
Shortcomings
Understanding the situation Dynamics of the Satisfying everyone, situation consensus Social Technical issues organization Distribution of power
Used in several disciplines Universal
Insufficients as such, a starting point
Measurable costs and benefits of the IS
Quantitative measurement Planning and following up Financial issues
Social organization
Strong traditions in accounting Insufficients as such, a starting poin "Oblitatory" Underdeveloped in health care Social acceptance problems
Competitive advantage search
Superior market share and service because of IS
Competition
Co-operation
Established theory Customer-driven
Market thinking underleveloped in health care
Resource-based approach
Resources used and saved by the IS
Inputs to the system Outputs, results Cumulating resources Making what you can afford
Fresh Discusses reality
Not established, application intuitive Concepts unsettled
Knowledge management
Changes in knowledge of the Knowledge as production organization because of the factor Sharing experiences IS, and its dissemination Knowledge creating
Market and organization dynamics
Health care knowledge intensive
Customer viewpoint often neglegted Operationalization difficult Concepts unsettled
Organizational learning
Adapablitity to new situations of the organization Turning individual knowledge into org. knowledge
Innovation, new solutions Adapting to environment Organizational survival Knowledge storing and sharing
Competitiveness Profitability Customer service
Fast cumulation of knowledge Suits badly to the traditionin health care appreciation of health care Cost awareness missing
Process analysis
Processes of health care provision and their implementation into IS
Streamlining processes Saving time Saving money
System integration Social issues
Effectiveness Quality issues of high importance
Sourcing analysis
Governance structures of
External relations
Organizational learning Much used
Roots in manufacturing"Human touch" forgotten
Gives the structure, but not contents
Proceedings of IRIS 23. Laboratorium for Interaction Technology, University of Trollhättan Uddevalla, 2000. L. Svensson, U. Snis, C. Sørensen, H. Fägerlind, T. Lindroth, M. Magnusson, C. Östlund (eds.)
service provision
Table 1
Efficiency of service provision
Different approaches to conceptualizing health care information systems
Knowledge cumulation Clear practical guidelines
