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Proceedings of the 36th Hawaii International Conference on System Sciences - 2003

Impact of Technology Sustainability on Healthcare Governance Thomas Lee Rodgers

Evan E. Anderson

Department of Information and Operations Management Texas A&M University, College Station, Texas [email protected]

[email protected]

Ming Yuan [email protected]

Abstract Healthcare technology investments must be borne by charity, government subsidy, or patient reimbursement. Such investments can be expensive and require partnerships of public and private institutions. This paper explores the relationship between technology sustainability and healthcare governance of multiinstitutional technology partnerships. A technology is assumed to be sustainable if the initial investment is paid and the operating costs are covered from one or more of these sources. Entirely possible is need for new governance forms in order to manage the initial and ongoing partner expectations. Can partnerships that initially rely on charity and government subsidy transform into self-sustaining or profitable operations? This paper incorporates findings from a business study of the Brazos Valley Telehealth Partnership (BVTP) that provides telemedicine infrastructure for a group of healthcare institutions who serve a seven county rural area. This paper explores the impact of technology sustainability on partnership governance. The findings are based on experiences gained during the formation and operation of the BVTP. The paper considers the valuation of network externalities. The paper posits that impact of technology adoption on organizational continuity on governance forms. The paper suggests incremental and continuous changes are best addressed by individual organizations or partnerships. For disruptive changes, new organizational forms are needed to isolate the disruptive impacts on organizations and processes. The paper concludes by advocating practical suggestions and further research. KEYWORDS: multi-institutional technology partnership, inter-organizational network, technology sustainability, healthcare governance, organizational continuity

Timothy Manning College of Medicine Texas A&M University Health Science Center, College Station, Texas [email protected]

1. Introduction Contributing to the global healthcare cost crisis are investments in medical devices and communications infrastructures. Conflicts often arise among patients, policy makers and healthcare management regarding the necessity and sustainability of the technology investment. Patient benefits must be weighted against resource allocation, concerns of policy makers, and healthcare management. Policy makers and charities might be willing to initially subsidize costly investments provided that ongoing use will eventually become selfsufficient. This paper explores governance and sustainability issues when multi-institutional partnerships form in order to adopt a healthcare technology such as telemedicine. The paper starts by defining terms (sustainability, governance, and aspects of technology adoption that affect sustainability and governance). The paper then draws from economics of network industries with sustainability scenarios. The Brazos Valley Telehealth Partnership (BVTP) is then introduced as an example of a multi-institutional healthcare partnership. The paper then introduces theoretical foundations for linking healthcare governance and technology sustainability. The paper concludes with a discussion of practical and theoretical implications.

1.1. Sustainability The concept of sustainability has an environmental origin. The core idea of sustainability was most influentially endorsed by the World Commission on Environment and Development (Bruntland Report) as “development that meet the needs of the present without compromising the ability of future generations to meet their own needs.” This environmentally friendly

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definition has been widely accepted by governmental, corporate and other organizations worldwide [8]. Translated into an economics-based, sustainability is the ability of a program to continuously maintain its activities and services in order to meet its objectives. Within a grant-funding context, sustainability relates to the ability to fund a project when the grant funds get less or are no longer available. Thus sustainability is thought to relate to institutional viability1, financial viability2, and the viability of program participants [10] . When the main program objective is technology adoption, whether the technology itself is sustainable becomes a major concern. Technology sustainability has financial and organizational dimensions. From a financial perspective, initial hardware and software costs are a small portion of total cost of ownership [2]. For example if grant-funds pay for initial hardware and software, will the partnership organization continue paying on-going upgrade and maintenance costs after the grant-funds are spent? This question extends to whether and how the organization aligns structure and processes to incorporate the new technology [10]. This paper arises from study of telemedicine adoption by a multi-institutional partnership. Telemedicine refers to “the use of electronic communication and information technologies to provide or support clinical care at a distance.” Telemedicine has not been widely adopted for reasons including reimbursement restrictions (Medicare and private insurance pay little or nothing for telemedicine services) and intrastate limitations on the practice of medicine (U.S. doctors must obtain an instate license in order to consult across state boundaries). The federal government as well as some specialty practitioner groups continue to sponsor feasibility studies and are requiring plans to foster sustainable telemedicine business models [13].

1.2. Governance Governance, in its most general meaning, conveys the idea of control. However, governance is indeed a term 1

“By institutional viability, we mean the institutional development of the credit program is such that it has the ability to deliver services on a sustained basis. In particular, a sustainable institution must have effective procedures for management succession.”

2

“Financial viability means that the program can equalize the cost per dollar lent with the price it charges for lending to its borrowers. Borrower viability means that the benefits from the program meet the cost of borrowing and borrowers have an incentive to repay their loans” Thus financial viability implies the ability to pass along borrowing costs and operating costs to borrowers who repay their loans.

with various meanings. As Oliver Coutard [4] quotes Jove, Lefevre and Offner as saying: Firstly, governance … may designate either an action or an organization, either a process or an institution. Secondly … governance simultaneously refers to general categories (all forms of management of transactions; local government) and to particular ‘species’ (network transactions, between hierarchies and markets; fragmented local institutions). Finally the fact that the notion originates from two distinct disciplinary fields – economics and management on the one hand, political science on the other – adds up to the confusion [9]. Pelletier-Fleury, et al., point out, “A governance structure is in fact a structure regulating the exchange, which articulates a direction mechanism, control procedures and an incentive system with respect to the terms of the contract [12].” The subject of healthcare governance may be examined from three levels: the level of the individual firms (management); the level of economic sectors (industrial organization and public regulation); and the level of the broader interactions of healthcare with society at large [4]. This paper focuses on the firm level and even more specifically on the management of a multi-organizational health care partnership. Such partnership governance is partially derived from the governance of individual clinical partners. Clinical governance has been formally defined as ‘a framework through which organizations are accountable for continuing to improve the quality of service and safeguarding high standards of care by creating an environment in which excellence in clinical care would flourish.’ [5] With the increasingly important role played by information technology in health care, the costs associated have been gradually shifted from patients to healthcare service producers. As could be expected, the costs themselves could be seen as thwarting the use of information technologies in the healthcare arena. Just as Pelletier-Fleury indicated that “implementation of organizational forms and mechanisms capable of regulating such telemedical relationships between health care producers – given the present institutional environment – constitutes an essential means for overcoming the barriers blocking the diffusion of telemedicine. “ [12] Governance issues arising from multi-organizational network partnerships include organizational and technical concerns. Are such multi-institutional partnerships governable? How should the partnership organize to equitably represent the interests of

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individual partners? Should technology leadership be designated or shared within the partnership? How does the partnership address adoption of technical standards?

an increasing rate because of externalities. The faster n grows, the more likely V will exceed C and the more likely the network will be sustainable.

2. Multi-Organization Network Valuation Economics.

The difference between total network value and individual connection value is attributed to network externalities [14]. This is to say that the total value includes value attributed to the individual connection as well as value external to the connection. Usually more difficult to quantify, externalities include goodwill and societal benefits indirectly resulting from the network. E Network participation in the context of telemedicine has the potential to bestow substantial externalities on nontelehealth users because of improved community wellness. In particular, if telehealth technologies and medical care providers are able to more quickly recognize symptoms, diagnosis and render clinical treatment to patients in remote inaccessible areas, other people in their neighborhood and community benefit from these services. Equation (3) shows asserts that the total value of a node including network externality value (ε) should be greater than or equal to the node cost.

Robert Metcalf, the founder of 3Com and a major designer of Ethernet, noted that the value of a network increases exponentially with the number of connected nodes. Metcalf’s law provides a measure of the value of network connectivity. The underlying issue is the presence of network externalities that bestow benefits to network participants beyond the value created by pointto-point bidirectional connections. Metcalf’s law suggests that network value is realized once a critical mass of connections is established. At a minimum, a measure of network connectivity is needed in order to consider the impact of Metcalf’s law on technology sustainability. Assume the value (υ) of an individual connection within a network (consisting of n nodes) is constant. In order to assure network participation for an individual the value of the node must be greater than or equal to the cost associated with the node. Equation (1) summarizes node value (υ) and cost constraint (c) as follows: Equation (1) υ = λ (n – 1) ≥ c where n is the subscriber base size. In this simple case, the total network value is the multiple of individual node values times the network size. Further in order to avoid financial loss, the total value for the entire network must be greater than or equal to total costs, as shown in equation (2): 2 Equation (2) V = υ • n = λ (n – n) ≥ C where C = n * c.

v +ε ≥ c i i i

Equation (3)

For multi-organization networks, the value of connections might well not be a constant value. Rather, value might vary depending on the connecting points as represented by sum of individual connections as shown in equation (4) (which assumes that λ is not a constant). Equation (4) V = ∑i =1,n

j =1,n

Further, organizations own a subset of nodes and possibly establish different value and cost constraints at the firm level. Three types of value-cost constraints are possible. First a firm might participate in a network if the direct value plus externality value is greater than direct costs ( v + ε ≥ c ). Second, a more cautious

b

tw Ne un ity m Co m

a

a

firm might participate only if the direct value is greater than direct costs ( v + 0 ≥ c ). Third, some members

or k

$ Value

a

N ua l ivid In d

λi , j = ∑ij==11,,nn (vi , j + ε i , j )

o rk e tw

n Figure 1: Network Value Versus Network Size Network size

As shown in Figure 1, the value for each individual network grows linearly as the network size increases. However the total community network value increases at

b

such as not-for-profit funding agencies might participate based entirely on the externality values ( 0 + ε ≥ c ).

c

c

For example local governmental agencies might be willing to invest in a technology network in order to promote regional healthcare and not necessarily as a means of reducing direct costs. Further subsidies can be used to induce organizations to participate in a network organization. Over time technology and implementation risks are expected to decline as the certainty of the return increases. Subsidies

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can provide incentive for firms for earlier participation as shown in Figure 2: Subsidy Period Risk / Return

Return

Risk

t0

Time

t1

Figure 2: Subsidy Period Figure 3 illustrates the subsidy impact. Without a subsidy, the firm would only invest in a high return project in which future returns are greater than total costs. With a subsidy, the firm can participate with a lower expectation of return; however, the firm might well not participate if the expected returns are too low. (A) High Return

$

Subsidy Period

(B) Moderate Return Cost without subsidy Subsidy Amount

Cost with subsidy (C) Low Return t0

t1

t2

Time

Figure 3: Impact of Network Subsidy For a multi-organizations network, economic sustainability is at the partnership level as well as the individual firm level. Three constraints are asserted: [1] Cumulative partnership value must be greater than or equal to total partnership costs V≥C (with C = ∑ci) [2] Individual firm value should be greater than or equal to total firm cost

∑ (ν

i

+ ε i ) ≥ ∑ ci

[3] The partnership must be willing and able to subsidize or afford to lose individual members who are in loss positions according to the previous firm constraint [2].

4. Distinctiveness Of Healthcare Provider Networks Healthcare provider networks are distinguished by the following characteristics:

• Revenue is based primarily on service fees and less on tangible good delivery. The service is delivered face-to-face and rarely done remotely. • Healthcare is local. Geographical proximity usually restricts patients to those living within a regional area. Few healthcare providers have national or international service areas. As a result large economies of scale are difficult to realize. • Providers are highly regulated by governmental authorities. For example doctors a licensed to practice within specific disciplines and within geographic areas (such as a state). • Healthcare providers compete primarily within vertical markets limited by physician licenses and have little opportunity for horizontal integration across disciplines. This paper focuses on how to sustain a network of healthcare providers who have formed a mixed partnership for the purpose of implementing a telemedicine network. Development of a telemedicine infrastructure is expensive and sharing infrastructure costs is a way to reduce costs for organizations that operation in a common or overlapping geographical area. Technology co-development can address the need to maintain compatibility and inter-operability of network systems. Perhaps patients can be better served by cooperating provider organizations. Therefore a multi-institutional partnership may be of interest. The barriers to cooperation include competitive pressures and internal technology leadership with vested interests in independent technology development. A myriad of technical issues exist including security, reliability, and resource control. A case study is now presented in order to provide further context and as an overall as yet untested thesis that a multi-institutional partnership, properly constructed, can be a viable way to improve the healthcare system within a regional area.

5. Brazos Valley Telehealth Partnership – A Multi-Institutional Telemedicine Partnership The Brazos Valley Telehealth Partnership (BVTP) consists of three organizational partner types (a regional hospital system, government-funded healthcare clinic, and a university-affiliated family practice residency clinic and program) and the College of Medicine for a major university located in a rural community. BVTP completed a series of telehealth initiatives and built a

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substantial telecommunications network (spending over two million dollars). BVTP projects have been funded primarily by federal and state government grants. Partner institutions provide operating funds and pay for salaries of their employees who work on BVTP projects. The partnership has yet to establish a fee-based or cost sharing agreement for network enhancement or maintenance. During Fall 2001, business college faculty and students conducted a business study of the BVTP [1]. In part, the business study provided a foundation upon which the partnership can grow. Among the report findings was a partnership governance discussion. Two major organizational scenarios were presented. The first scenario assumes that BVTP continues to be substantially sustained by grant funds. Authority resides primarily with Principal Investigator(s) and is established by grant contract terms. Governance structure is derived from mutually beneficial activities. Central governance is loose and informal. Officers and positions are recognized based on grant raising success. For scenario two, BVTP is sustained by revenue and cost-sharing agreement. Authority resides with a governing body. Governance includes formal policies and procedures. The governing board selects officers and appoints executive staff. The second scenario is considered a partnership goal.

5.1. Are multi-institutional partnerships governable? BVTP consists of four healthcare related partners with diverse, yet compatible interests. The lead institution is a college of medicine of a major university located in a rural community. During their first two years of study, medical students are located at the university. During their two years of clinical training, medical students are relocated approximately 80 miles away at a regional hospital setting. The College of Medicine has need for telecommunication connections among faculty and students located in the two sites. The university-affiliated family practice residency program provides a three-year post-doctorate training that prepares family practice doctors to practice in rural and underserved communities. The residency program has working relationships with rural clinics and also has need for telecommunication connections with their associated rural affiliates. In addition, faculty members in the University College of Medicine supervise residents and practice medicine in the main family medicine clinic. In some cases, the faculty members can save time and expense by using remote telemedicine and

teleconferencing when they supervise residents. The third partner is a regional non-profit religious hospital system with one major hospital, three rural hospitals and a number of regional clinics. Some of their rural hospitals and clinics are affiliated with the family practice residency program and hence need to be connected to the family practice residency to the extent that residents are co-located. The main hospital has announced a major expansion program ($38 million) for the main hospital and is unlikely to commit more resources to the partnership. To a limited extent they are willing to subsidize rural facilities recognizing that almost one-half of patients at the regional hospital come from communities served by their rural hospitals and clinics. The hospital system desires to communicate among and between their facilities to some extent and view membership in BVTP as a vehicle for gaining access to a higher bandwidth communications infrastructure. The last partner is a rural clinic that services military veterans. Their major regional hospital is located in the same town that is eighty miles removed as the residency hospital that serves the university college of medicine. While need exists to communicate between the veteran’s clinic and the regional hospital, the major partnership motivation is access to expanded bandwidth. A complicating factor for the veteran’s clinic is that most telecommunications support and management is made at the regional hospital and even at the federal level. Consequently, the local clinic has limited ability to commit resources to BVTP projects. BVTP formed in responses to a state-sponsored grant opportunity. The state government designated a portion of the telecommunications fee for building rural community telecommunication infrastructure. Because BVTP partners reside in rural communities, the partnership was formed and the grant was awarded. The University College of Medicine staff wrote the grant proposal and provided technical leadership. No formal partnership meetings were held until recently and towards the end of the grant period. One purpose of the business study was to consider ongoing governance. How should the partnership be governed? The BVTP governance question might be better restated. How can a technology-focused multi-institutional initiative be sustained beyond the grant period? BVTP successfully deployed higher-bandwidth communications infrastructure and telemedicine equipment adopted for use by member partners. Once completed, should the partnership continue as a grant-seeking alliance lead primarily by the University College of Medicine, or should the partnership more formally organize and adopt a business model based on profit generation or

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cost sharing? As suggested in the business study recommendations, BVTP will continue in the short run as a grant-seeking partnership and consider a revenue and cost-sharing agreement as a longer-term goal.

5.2. How should the partnership organize to equitably represent the interests of individual partners? While BVTP accomplished the stated grant-funding objective of building a telecommunications infrastructure to service rural communities, difficulties have arisen concerning individual partner interests. Potential conflicts of interest arise for each partner. The University College of Medicine needs higher-bandwidth telecommunication; however, their primary concern is academic research and teaching. A complex set of relationships exists between the regional hospital system and other potential BVTP partners. Most notably the regional hospital system directly competes with the health maintenance organization (HMO) that owns the residency-training hospital. The HMO has a large clinic in the university community and provides emergency room services at the main hospital of the regional hospital system. The HMO also has rural clinics that are in direct competition. In addition, the regional hospital system has very strong aversion to working with healthcare institutions providing abortion services. Thus the regional hospital prefers to not partner with the HMO when they are in direct competition and would refuse to work with institutions that provide services contrary to their religious convictions. The veteran’s clinic technology leadership is at the regional and even federal level. The veteran’s clinic staff has limited technology capability and ability to actively participate in the partnership. From a practical perspective, the only overlapping partnership interests are cost sharing for purpose of gaining access to higher-bandwidth. All other potential activities are best met between partners and not at the partnership level.

5.3. Should technology leadership be designated or shared within the partnership? University College of Medicine staff has provided technology leadership for BVTP. While consulting with technical staff from partner institutions, university staff has been responsible for purchasing grant-related equipment. Some controversy arose because initially purchased telemedicine equipment was not well accepted by the rural hospital and clinics owned by the

regional hospital system. In part, the incompatibility arose from a need to change medical processes; hence the new equipment introduced disruption into the existing processes and organization. Alternative vendor equipment was purchased and installed subsequently that is less disruptive and better favored by the rural hospital staff. Not withstanding, University College of Medicine staff was able to learn more about adoption of telemedicine and gather valuable research insights. Who is best to provide technology leadership? If technology leadership is designated to one partner, care must be taken to consider not only technology impacts but also organizational and process impacts on other partners. If technology leadership is shared, who takes responsibility for project execution and on-going maintenance?

5.4. How does the partnership address technical standard adoption? Within an institution, governance boards adopt and then enforce technical standards such as communications protocols, hardware / software architecture, and development methodologies. When the partnership consists of multiple institutions, the likelihood of incompatibilities and necessity of coordination increase. For example, BVTP institutions are in the process of developing electronic patient records. The family practice residency has selected a vender and an implied patient record format standard. Within the university system, the student health center is considering another vendor and yet another record format standard. To what extent should the partnership consider and adopt common technical standards? University College of Medicine researchers are more likely to be willing to explore technical standards in part because they are researchers and do not directly provide patient care. This is to say that they have research interests that include consideration of different technical standards. The veteran’s clinic staff is unable to commit their organization to technical standards. Should the partnership only adopt those standards that are shared or allow support of all standards held by partner institutions?

6. Moving towards a theory of governance and sustainability The BVTP business study provided a source for practical as well as theoretically interesting questions to consider technology sustainability and partnership governance. Following are considered one primary and

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two secondary causal constructs from which validated instruments can be constructed and eventually a more comprehensive theory of governance and sustainability derived: technology impact on organizational continuity, and Moore’s Law. The major new concept identified in this paper is technology impact on organizational continuity. Organizational continuity is the extent to which organizational or process changes are required as a result of introduction of a new technology. Organizational continuity refers to whether the organization and processes are changed incrementally or radically. Hardware and software changes that require minimal organizational impact have high continuity. Changes that require significant (disruptive) organizational impact have low continuity. This is not to say that either high or low continuity is better. Rather organizational continuity measures the extent to which technology changes require organizational and processes changes. This paper asserts that partnerships that support high organizational continuity can be sustained using shared governance. New organizational forms are needed when low organizational continuity changes are anticipated. Low continuity changes can be followed by a series of high continuity changes. This is to say that once a disruptive change occurs then incremental and continuous changes can be expected thereafter. Christenson cites the evolution and revolution of removable disk drive technologies as examples of how technology disruption is followed by incremental change [3]. New generations of disk drive technologies (progressing from 8” to 5.25” to 3.5” to 2.5”) were introduced that initially targeted low margin markets. As the newer generation gradually improves it consumes the cost and performance of the older generation technology. Leadership is torn from stakeholders of older generation technologies by a new generation of stakeholders in lower margin new generation technologies. Christenson refers to this process of disruption and subsequent incremental change as “the innovator’s dilemma.3” He refers to low continuity as “sustaining technological change” and high continuity as “disruptive technology change.” This paper asserts that organizational continuity is a primary factor in governance and technology sustainability. 3

Christensen states that the innovator’s dilemma occurs in disruptive innovations, where we know least about the market, that there are such strong first-mover advantages.

Gordon Moore, co-founder of Intel Corporation, noted that the microchip capacity doubled every 18-24 months. This observation has been a force that both drives and controls expectations of technology costs and performance. Moore’s law implies that for the same cost you can receive twice the capacity every 18 to 24 months; another way of stating this is that you can pay half as much for the same capacity if you wait 18 to 24 months. Moore’s law is projected to continue until at least 2014 and past the introduction of nanotechnologies. Multi-institutional partnerships should consider Moore’s law when purchasing computer hardware. The value of the hardware should decrease by at least 50% every two years. Thus consideration should be given to phasing such purchases over time and adoption of a hardware rotation policy in which newer hardware is placed in locations with highest demand and older hardware is rotated to less demanding locations. Doing so across institutions is even more challenging. Such partnerships should consider owning the equipment and formally define the basis for equipment rotation through its governing policies.

6.1. Considering Success Certainty and Degree of Control When should a technology project be handled internally or externally depends in part upon the certainty of technological success and the degree of control that each partner can assert. Assuming organizations expect successful technology adoption when technology decisions are made, organizations are more likely to implement a technology internally as if they are certain of a successful outcome and if they have a high degree of control over the adoption process. Success can relate to expectations of tangible gains such as increased revenues or decreased costs that create an expectation of return on investment. Success can also relate to expectations of intangible gains such as knowledge acquisition or implementation of technologies that have competitive or strategic significance (for example implementation of electronic patient records as a marketing advantage and costreduction driver). Degree of control relates to whether the organization has the internal resources and experience necessary to use the technology. Dubois and Håkansson suggest that inter-organizational networks form as a result of different types of control [6]. Activities taken within the firm are tightly controlled within the firm. Inter-organizational networks are formed to address activities outside the firm that affect the firm.

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Success

3. Extra-organizational “Diamond Quest” 2. Multi-institutional Technology Partnership

Disruptive

Organizational Continuity 1 Intra-organizational Strategic Initiative

Certain Å

In figure four, three distinct scenarios are asserted depending on success certainty and degree of control. First, inter-organizational strategic initiatives are most appropriate given high success certainty and high degree of control. Little motivation exists for an organization to seek institutional partners when they are certain to succeed and control the adoption process. Introducing outside partners potentially decreases both certainty of success and degree of control. Second, multi-institutional technology partnership form when the institutions can either share adoption risks or when degree of control is reduced in partnership (specifically, the partnership has better resources than the individual institutions). When success is uncertain and control is low, institutions will rationally not engage even in a partnership. This third scenario is labeled as extraorganizational “diamond quest.” The extra-organization suggests that whoever champions such technology adoption will come from outside the organization. “Diamond quest” is suggestive of a search for high value in a field containing many potential dry holes.

Æ Uncertain

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Incremental / Continuous

High Å

Control

Æ Low

Figure 4. Success certainty and degree of control The degree of technology continuity directly relates to the three scenarios. High continuity changes require success certainty and high control. Low continuity changes can be considered to be “diamond quests” with success uncertainty and low control. This paper asserts that testable hypotheses can be derived. Empirical questions arise as to under what conditions of success and control are technology partnerships formed and sustained. A preliminary set of hypotheses is presented later in this paper.

Revenue Category 1 Charity

Revenue Source • Gift • Grant

Governance Non-Profit

2

Government Subsidy

3

Patient Reimbursement

• • • • • • •

Medical care Taxes Incentive Private pay Private insurance HMO PPO

Non-Profit Indirect reimbursement Non-Profit For-Profit

4

Research

5

Cost Sharing

• • • • • •

Clinical trial Federal grant State grant Telecommunications Equipment Facilities

Non-Profit Indirect reimbursement Indirect reimbursement

• • • • •

Donors Fundraising Worthy cause Statutory legislation Community expectations

• Cost-containment pressure to increase volume while decreasing margins • Offer higher margin services • Quality and control of experimental variables • Record keeping discipline • Need cost accounting and a “win-win” situation

Table 1. Impact of Funding Source on Governance

6.2. Funding Source Table 1 summarizes funding source impact on healthcare governance. How the partnership is

governed depends on the source and nature of funding. Profit opportunity appears to be difficult and possibly limited to private pay patient services. Another

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possibility is royalty income resulting from research technology transfer.

6.3. Case for a New Organizational Form For BVTP, University College of Medicine research staff seeks to study innovative technology adoption. Adoption of shared governance might well focus partnership efforts on high technology continuity and diminish the sponsorship of technology innovation. How can a multi-institutional partnership foster technology innovation? Arising is potential need for a new organizational form. This problem has historical precedence. Major technology vendors such as AT&T and IBM were well known for their corporate research centers. In some cases, independent consortiums (such as the Microcomputer Computing Consortium) have been formed in order to focus on technology innovation. Another model is the formation of a research consortium (such as the MIT Media Lab) centered at a major university and from which technology transfers in terms of royalties and corporate spin-offs are encouraged. Are one of these governance forms well suited for multi-institutional healthcare partnerships? This paper suggest that a survey be conducted covering to what extent innovation occurs within multi-institutional partnerships and whether successful innovation is associated with novel forms of governance or is related to innovation leadership by one of the partners (such as a university research program).

baseline, the partnership has a basis for determining success. The partnership should explicitly consider adoption of technical standards and to what extent partners are willing to adopt common practices and technologies. The partnership should also explicitly consider whether and how technology innovation would be supported.

7.2. Implications for Theory Table 2 contains an initial list of testable hypotheses related to technology continuity and technology sustainability of healthcare multi-institutional partnerships. SUSTAINABILITY 1. Given early adopter penalties and expectations of innovator returns, multi-institutional partnerships are not well suited for low organizational continuity changes. 2.

Given Moore’s Law and shared objectives, high continuity changes are sustainable.

3.

Network externalities, apart from their distribution, increase partnership sustainability.

4.

As information exchange between partners increases, the partnership becomes more sustainability. Fore example, communities of practice foster meaningful information exchange.

5.

As the number of distinct organizations within the partnership increases, the likelihood of sustainability decreases.

7. Conclusion This paper invites further study of technology sustainability within the context of multi-institutional partnerships. The paper begins to consider the impact of network externalities and cost allocations on sustainability and governance. The paper considers distinctive characteristics of healthcare provider networks. The paper suggests that the impact of technology adoption on organizational continuity directly affects governance form. The study of multiinstitutional healthcare partnerships contributes to practice and theory.

7.1. Implications for Practice Historical motives for multi-organizational network formation are to increase revenues or reduce costs [7]. Partner revenue, cost, and projected growth expectations should be explicitly documented during the process of partnership formation. From such a

GOVERNANCE 6. Sustainable multi-institutional technology partnerships explicitly address technical standards. ORGANIZING INITIATIVE 7. Multi-institutional technology partnerships focus primarily on high organizational continuity changes. 8.

Low organizational continuity changes require strong leadership and focused vision. Table 2. Testable Hypotheses

This paper advocates development of a validated measure of technology impact on organizational continuity. Tyre and Hauptman identified and measured the degree of uncertainty associated with a given technology change as well as three attributes of technological change: technical complexity, systemic

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shift, and project size [15]. The degree of uncertainty was determined by (1) the novelty of specific new features and functions, and (2) the required departure from established operating assumptions and organizational relationships. Tyre and Hauptman found these attributes to be significant predictors of the degree of uncertainty. More interestingly, they found that the higher the level of technical novelty involved, the less useful was overlap between engineering and manufacturing functions. This challenges the general prescription that cross-functional team involvement in major technical projects always should be maximized, regardless of the nature of the change involved.

[7] Ebers, M. (1997). The Formation of InterOrganizational Networks. New York, Oxford University Press. [8] Holmberg, J., K.-H. Robèrt, et al. (1996). Socioecological principles for sustainability. Getting down to earth practical applications of ecological economics. R. Costanza, S. Olman and J. Martinez-Alier. Washington, D.C., International Society of Ecological Economics, Island Press. [9] Jouve, B., C. Lefévre, et al. (1995). La gouvernance urbainer. Marne-la-Vallee, ENPC Latts.

References

[10] Khandker, P. and R. Shahidur (1995). Sustainability of a Government Targeted Credit. Washington, D.C., World Bank.

[1] Anderson, E. A., M. S. Poole, et al. (2002). Brazos Valley Telehealth Partnership Business Report. College Station, Texas, Texas A&M University: 59.

[11] Leonard-Barton, D. (1988). “Implementation as Mutual Adaptation of Technology and Organization,” Research Policy 17: 251-267

[2] Boehm, B.W. (1981). Software Engineering Economics Englewood Cliff, N.J.: Prentice-Hall [3] Christenson, C. M. (1997). The innovators dilemma: when new technologies cause great firms to fail. Boston, Mass., Harvard Business School Press. [4] Coutard, O., Ed. (1999). The governance of large technical systems. [5] Donaldson, E. J. and J. A. M. Gray (1998). "Clinical governance a quality duty for health organizations." Quality in Healthcare 7: S37-S44. [6] Dubois, A. and H. Håkansson (1997). Relationships as Activity Links. The Formation of Inter-Organizational Networks. M. Ebers. New York, Oxford University Press: 43-65.

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