Impact Of Information Technology On Gaining Competitive Advantage In Healthcare Industry

Evolution of Information Technology in Healthcare Industry

Healthcare industry is always under pressure to improve the healthcare standards, patient safety, and reduce medical errors. If an organization can integrate its healthcare system with information technology, it can reduce the medical errors and improve its service which will in return help it in gaining competitive advantage over its competitors (Bates, 2000).While medical staff and patients have always been, and will continue to be at the heart of healthcare, the value of the use of IT in a patient-centric approach to care is starting to reveal itself and for everyone concerned, the improvements are there to see (Strategyand.pwc.com, 2017).

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In just 30 years, information technology (IT) has profoundly changed healthcare. Electronic medical records, online second opinions, real-time virtual visits, eHospital critical care monitoring is just  but the beginnings of how IT systems are enhancing healthcare delivery in the 21st century (Harris, 2017).

IT has positive effect on healthcare system resulting in gaining the competitive advantage but on the other hand, there are few factors like cost of implementation and reluctant to use IT due to cultures/beliefs which has negative effect on gaining competitive advantage. This research therefore, will evaluate how the two factors affect the gain of competitive advantage in healthcare system. 

Proper use and integration of IT has resulted in enhancement of any field. (Reid, Compton, Grossman, and Fanjiang, 2005). Healthcare industry has always been a topic of interest. Advancements in healthcare procedures and healthcare delivery has attracted many other industries. Information Technology is one sector which has successfully integrated with healthcare industry and resulted in benefit of millions of patients.

Although there are many benefits of IT integration with healthcare but still there is some ignorance in handling the technology in healthcare. Few companies are reluctant in making full use of Information Technology. Some people do not want their work to go digital. Bates (2000) suggests that several information systems interventions like computerized physician order entry, computerized physician decision support, robots for filling

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prescriptions, bar coding, automated dispensing devices, and computerization of the medication administration record have been shown to reduce medication errors considerably.

For this research, quantitative research methodology will be followed. Literature review was done by studying different articles, books, and journals. Objectives and research questions were prepared, hypothesis was done.

  • Examination of how cultures/beliefs and cost of implementation affect the gain of competitive advantage in the health sector 
  • To describe the use of IT in the health care sector,types of ownership of healthcare units and integration of IT into the heath care units departments
  • To find the relationship between IT integration into the health care system and type of ownership of organization
  • To find the relationship between integration of IT into departments of health units and views on the cost of implementation
  • To find the relationship between integration of IT into the health care system and views on cultures/beliefs

There are different factors that contribute in gaining competitive advantage by using IT in healthcare industry.. Error free patient care, electronic health records, and healthcare tools are the few outcomes of using IT in healthcare industry. Use of IT is not always welcomed. There is always constant resistance from the users to use IT in healthcare and, implementation cost of IT is also very high. The raise in healthcare standard and the constant support for the introduction of IT in medical field has always been the positive variables for this research. Although there are many positive factors but there are few weaknesses also that might affect that research results.

Positive and Negative Factors Associated with IT Integration in Healthcare Industry

Theoretical framework gives the overview of different theories and analysis done. Different factors contribute towards the competitive advantage whereas there are certain factors which need to be avoided or improved. 

H0:There is no association between integration of IT and views on cost of implementation of IT

H1: There is an association between integration of IT and views on cost of implementation of IT 

H0: There is no association between integration of IT into the health system and cultures/beliefs

H1: There is no association between integration of IT into the health system and cultures/beliefs 

By doing research on this topic, I would like to find out how information technology can be used as a blessing for healthcare industry and how it can be used to gain competitive advantage in healthcare industry.

“The future of healthcare is on your computer, your phone, your tablet, your network and the World Wide Web,” says Dr. Harris (2017). “By connecting patients with caregivers ? and caregivers with each other ? we will be better equipped to diagnose conditions, recommend treatments and monitor patients in ways that weren’t possible 10 years ago.”

Information Technology will make healthcare more affordable for everyone and chances of mistakes will reduce. It will revolutionize the healthcare industry in next few years. So, scholarly community must continue doing research on this topic to understand the relationship between IT and healthcare.

Information Technology. the technology involving the development, maintenance, and use of computer systems, software, and networks for the processing and distribution of data (Merriam-Webster’s dictionary, 2017)

Competitive Advantage. A superiority gained by an organization when it can provide the same value as its competitors but at a lower price, or can charge higher prices by providing greater value through differentiation. Competitive advantage results from matching core competencies to the opportunities (Business Dictionary, 2017). 

It will be make sure that all the ethical principles will be met while conducting the research. The main ethical principles are informed consent, beneficence, respect for anonymity, and respect for privacy. Other than that, there are few more considerations while doing the research like data sharing, data protection, copyright guidelines, confidentiality etc. No personal information will be used without consent, nobody will be harmed during this research, references will be made and co-authorship will be mentioned wherever necessary.

Delimitation is defined as the scope of research. While conducting a research area of research or boundary line of research should be considered. This research focuses on use of information technology to gain competitive advantage in healthcare industry. The demographic boundary of this research will be restricted to North America and as per techniques are considered, different research papers, studies, and books will be followed to support the hypothesis. .

IT and Patient-Centric Care

The main limitation in conducting this type of research is that accurate data is not available. Around 90 percent of research today shows positive effect of information technology on healthcare industry whereas there are few factors like user acceptance and cost of implementation which can result in negative effect (Buntin, Burke, Hoaglin, and Bluementhal, 2011). In deductive approach, one will rely on the research that has already been done but nobody can say anything about the authenticity of the research.

Healthcare industry is always under pressure to improve the healthcare standards, patient safety, and reduce medical errors. If an organization can integrate its healthcare system with information technology, it can reduce the medical errors and improve its service which will in return helps it in gaining competitive advantage over its competitors. While medical staff and patients have always been, and will continue to be at the heart of healthcare, the value of the use of IT in a patient-centric approach to care is starting to reveal itself and for everyone concerned the improvements are there to see (Strategyand.pwc.com, 2017).

Even though information technology (I/T) has evolved from its traditional orientation of administrative support toward a more strategic role within an organization, there is still a glaring lack of fundamental frameworks within which to understand the potential of I/T for tomorrow’s organizations (Henderson and Venkatraman, 1999). User acceptance of and implementation cost of IT are road blocks in facilitation of IT in an organization. If these two roadblocks are overcome, IT can be used to gain competitive advantage for an organization. In the 3 decades since the term “medical informatics” was first used, individuals working at the intersection of information technology (IT) and medicine have developed and evaluated computer applications aiming to improve health and health care (Hersh, 2004). The process of information technology adoption and use is critical to deriving the benefits of information technology. Yet from a conceptual stand-point, few empirical studies have made a distinction between individuals’ pre-adoption and post-adoption (continued use) beliefs and attitudes. This distinction is crucial in understanding and managing this process over time (Karahanna, Straub, and Chervany, 1999).

conceptual stand-point, few empirical studies have made a distinction between individuals’ pre-adoption and post-adoption (continued use) beliefs and attitudes. This distinction is crucial in understanding and managing this process over time. 

In last few decades, evolution of information technology and its use in healthcare industry has totally changed the healthcare field (Thompson and Brailer, 2004). Online appointments, electronic billing, electronic billing records etc. are few examples of how integration of information technology with healthcare has changed the healthcare delivery. The effect of information technology on healthcare industry is even more profound when it comes to diagnosis and treatment. Different cancer diagnosis and treatment techniques like image reconstruction, image data storage, image transfer, DICOM and PACS etc. are benefitted hugely with involvement of IT. Implementation of HIPPA regulations has improved the security standards and protecting the patient’s healthcare information.

Ethical Considerations in Research

According to Dr. Harris, Chief Information Officer at Cleveland Clinic, in just 30 years, information technology (IT) has profoundly changed healthcare. Electronic medical records, online second opinions, real-time virtual visits, eHospital critical care monitoring — it’s just the beginning of how IT systems are enhancing healthcare delivery in the 21st century (Harris, 2017).

 Competitive advantage refers to the set of conditions which helps a business in getting favorable position as compared to its rivals. A competitive advantage is an advantage gained over competitors by offering customers greater value, either through lower prices or by providing additional benefits and service that justify similar, or possibly higher, prices (Ehmke, 2008).

Competitive advantage can be gained by offering the customers something at lower cost or at higher value which its competitors cannot. A sustainable competitive advantage means upholding the favorable conditions which makes the company successful. A firm that can discover a better technology for performing an activity than its competitors thus gains competitive advantage (Porter, 1985).

There are several factors which can be used to gain favorable position over competitors in healthcare industry.

  • Cost reduction. Cost reduction is the main factor when it comes to gaining competitive advantage. Online appointments, billing records, online billing can reduce the both time and money cost (Bates and Gawande, 2003).
  • Maintaining Database entries.Entering the patient’s information in hospital database can make it easy for doctors to understand patient’s history even if patient is not present physically at that time. It will help in maintaining uniformity of patient’s information and thus result in effective treatment plans (Bates and Gawande, 2003)
  • User friendly website.A user-friendly website can attract many people. If a hospital’s website has features like live chat and 24X7 helpline which can answer preliminary questions about health, it can be a huge factor to gain competitive advantage (Bates and Gawande, 2003).
  • Tracking tool.Having a tracking tool which will track patient’s progress and send out alarm to hospital staff if progress is dropping will be additional factor for competitive advantage (Bates and Gawande, 2003).
  • Patient’s knowledge.With the integration of IT with healthcare, patients can get visual representation of their health. For example, ultrasounds, X-rays, radiography has made it possible to get better idea of health for patients and doctors both (Bates and Gawande, 2003).

Use of Information Technology in Healthcare Industry is a very vast field. This topic has become so important to the healthcare industry that different schools have started offering Masters in Healthcare Informatics.

To study the benefits of health information technology, Buntin, Burke, Hoaglin, and Blumenthal (2011) used previous articles based on the peer-reviewed literature for the period of 1994-2007. Basit Chaudhry and colleagues covered articles from 1995 to January 2004, and Caroline Goldzweig and colleagues examined articles from June 2004 to June 2007. They used the methods and selection criteria of these two studies to update their findings on the effects of health IT for the period July 2007 up to February 2010. Online database MEDLINE was used for search purposes from 2007-2010 and total 4,193 articles were searched. Comprehensive approach was followed for conducting this study. Inductive research approach was followed very successfully. Articles for this research was successfully narrowed down from 4.193 to 100 in the end based on the research criteria. Previous study results were used but new topics like use of IT in clinical practice and measure of quantitative and qualitative results of use of IT in clinical practice. Few topics were dropped from the previous studies.

Inductive research approach is the best approach to follow for this topic as the topic is very vast and reviewing the literature with new perspective will give good results.

Limitations of Research

SWOT Analysis of Information Industry and Healthcare Industry (Helms, Moore and Ahmadi, 2008) focus on internal strengths and weaknesses, and external opportunities and threats in to analyze medical error reduction, patient safety, timely information to health records and patient privacy. Patient safety, investment in IT in healthcare industry, and improvement in patient safety emerged out as main internal strengths whereas lack of System integration, resistance to use IT in healthcare industry emerged out as weaknesses. Use of internet, support for IT in healthcare, and raise in standards after introduction of IT in healthcare are main opportunities whereas HIPPA compliance, loss of trust, and cost of IT implementation are main external threats.

Use of information technology as weapon on healthcare system is of great interest for medical and academic research scholars. Different scholars follow different approaches. Implementing IT in healthcare can be done by taking care reviewing literature and reapplying integrating concepts, field experience examination id another approach, and re-examining several successful IST applications could be one approach too.

Figure 1. (Appendix A) of theoretical framework gives the overview of different theories and analysis done. Different factors contribute towards the competitive advantage whereas there are certain factors which need to be avoided or improved. This framework will help me crating hypothesis and answering my research questions.

Different philosophers have explained different research worldviews but there are four that are widely discussed: Postpositivism, constructivism, Advocacy, and Pragmatism (Cresswell, 2014). Post-positivism research approach accepts the critique of traditional positivism that has been presented by the subjectivists, without going so far as to reject any notion of realism. In post-positivism approach one tries to represent the reality (Sukamolson, 2007). For this research, post-positivism research worldview has been selected because this study requires statistical analysis and scientific approach which are both parts of post-positivism. Hypothesis, research questions will be answered better if post-positivism research worldview is followed. 

There are three different types of research designs, qualitative, quantitative, and mixed methods. Different worldviews follow different research designs.There are different laws and theories that need to be testified and verified so that we can use these again and again(Creswell,2013). A post positivist’s observation is based on the theories that already exist and follow the quantitative design. The purpose of quantitative design is to compare the variables, precise measurement, establish relationship between variables, and then expand from a sample to population (Morse, 2003). So, quantitative design will be followed for this research. A non-experimental approach will be taken for quantitative design. Relationship between the already existing variables will be studied and the research questions/hypothesis will be formulated. Research questions in quantitative study means variance or the questions related to process. After data collection, and data analysis, validity of data will be checked.

Blaxter, Hughes, and Tight (1996) argue that quantitative research is concerned with the collection of data and analysis of data in numeric form. It focuses on relatively large scale and sets of data (Blaxter, Hughes, & Tight, 1996). Quantitative research approach is basically deductive and tests an existing theory. The research strategies used in quantitative research are experiment, surveys, and predetermined instruments in data collection to produce statistical data. Bryman (2015) asserts quantitative research usually emphasizes quantification in the collection and analysis of data.

The strategy followed for this research is survey. The research topic “Use of IT to gain competitive advantage in Healthcare Industry” is a very wide topic. It requires large sets of data to be studied and find out the gaps.

Abbas and Charles (2003) defined “method” as a design component that includes (a) the relationship that the researcher establishes with individuals and groups being studied, (b) the selection of sites, participants, settings, and times of data collection, (c) the methods used for data collection, and (d) the strategies used for data analysis (Abbas & Charles, 2003).

The research data in quantitative research is typically gathered through surveys using close-ended questionnaires. These surveys and questionnaires are designed and developed very carefully to provide the numerical data to yield results from the data. 

Descriptive and inferential analysis are the two data analysis techniques for quantitative research.  Donnely and Trochim (2001) showed that Descriptive Statistics are used to describe the basic features of the data in a study. They provide simple summaries about the sample and the measures. Together with simple graphics analysis, they form the basis of virtually every quantitative analysis of data. With descriptive statistics, you are simply describing what is, what the data shows where as inferential statistics investigate questions, models and hypotheses. In many cases, the conclusions from inferential statistics extend beyond the immediate data alone. Thus, we use inferential statistics to make inferences from our data to more general conditions; we use descriptive statistics simply to describe what’s going on in our data (Donnely & Trochim, 2001).

For this study,we will use the data gathered from questionnaires.The data will be cleaned,coded and entered into SPSS for analysis. Descriptives  statistics  using  frequency distribution tables,appropriate graphs and measures of central tendencies will be done to describe our data and then, inferential statistics  using chi-square tests will be carried out to test our hypotheses.

Inferential statistics will be carried out at 5% level of significance and the decision to reject or not the null hypothesis will be determined through comparison of the p-value and level of significance .The decision rule ;reject null hypothesis if p-value is less than the level of significance otherwise,we do not reject the null hypothesis.

Population

This research topic is wide and the population for this topic includes the organizations, organization staff, and the patients.

The target population for this study are the health care units within North America that have integrated IT into their system.This narrows down to specific demographic area.

As the research topic is wide and the population under the topic is large, a sample data was chosen. According to Suresh, Suresh, and Thomas (2011), A major purpose of doing research is to infer or generalize research objectives from a sample to a larger population. The process of inference is accomplished by using statistical methods based on probability theory. A sample is a subset of the population selected, which is an unbiased representative of the larger population. Studies that use samples are less-expensive, and study of the entire population is sometimes impossible (Suresh, Suresh, & Thomas, 2011).

For this research, Stratified Sampling method will be used. Based on the research, four stratas based on the type of the organization;private,governmental,non-profit and profit.Then,a simple random sample will be drawn from each stratum proportional to the sample size. Stratified random sampling is used because the health units are heterogeneous.This reduces the cost per observation,produce a smaller error of estimation compared to simple random sampling and also estimates of population parameters may be desired for subgroups of the population

The bar chart below shows that 63.42% of the respondents are actively practising IT in their healthcare system while 36.58%  are not actively practising IT. 

The bar chart shows that 74.5% of the health units sampled are privately owned,14.6% owned by the government,5.9% are non-profit and 5% are profit organizations. 

Among the health units in our study,92.3%  of them have managed to integrate IT in all departments within their facility,4.5% partly integrated but not in all departments while 3.2% have not managed at all to integrate IT into their system. 

This research utilized chi-square tests to test for associations between variables.The variables under study are categorical hence chi-square test is the appropriate test statistic.

Chi-square test is used to test for associations between two more categorical variables(Agresti and Kateri,2011) 

The clustered bar chart below displays the association between the two variables 

H0:There is independence between IT integration and the type of organization

H1:There is no independence between IT integration and type of organization 

Chi-Square Tests

Value

df

Asymp. Sig. (2-sided)

Pearson Chi-Square

58.754a

4

.000

Likelihood Ratio

46.653

4

.000

Linear-by-Linear Association

14.051

1

.000

N of Valid Cases

2732

a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 8.85.

The chi-square tests revealed that there is a significant association between IT integration and the type of organization.The analysis yielded(chi-square value with 4 d.f=58.754,p-value=.000) which led to rejection of null hypothesis since .000<.05

H0:There is no association between integration of IT and views on cost of implementation of IT

H1: There is an association between integration of IT and views on cost of implementation of IT

The clustered bar chart below is a graphical representation of the two variables.

The chi-square test revealed that there was no significant association between those health units that have managed to integrate IT in all departments and their views on the cost of implementation of IT into the health system.They all believe that the cost of implementation is high. 

Chi-Square Tests

Value

df

Asymp. Sig. (2-sided)

Pearson Chi-Square

9.873a

8

.274

Likelihood Ratio

9.479

8

.304

Linear-by-Linear Association

2.900

1

.089

N of Valid Cases

1376

a. 4 cells (26.7%) have expected count less than 5. The minimum expected count is 1.63.

The clustered bar chart below displays the distribution of these two variables 

H0: There is no association between integration of IT into the health system and cultures/beliefs

H1: There is no association between integration of IT into the health system and cultures/beliefs

The chi-square test gave the results in the table (chi-square value with 8 d.f=1.173E2,p-value=.000).This reveals that there is a significant association between integration of IT into the health system and cultures/beliefs.

The health facilities that feel there is rarely or no conflict between cultures/beliefs and adoption of technology has integrated IT into all or most departments of their facility as compared to their counterparts who belief otherwise. 

Chi-Square Tests

Value

df

Asymp. Sig. (2-sided)

Pearson Chi-Square

1.173E2a

8

.000

Likelihood Ratio

91.746

8

.000

Linear-by-Linear Association

104.618

1

.000

N of Valid Cases

2203

a. 4 cells (26.7%) have expected count less than 5. The minimum expected count is .77.

Our analysis gave results that solved the problem of our research,we were able to examine how cultures/beliefs and cost of implementation affect integration of IT into the healthcare system.

We found that there was a significant association between IT integration and the type of organization since the results led to rejection of null hypothesis of independence.Private organizations were seen to have integrated technology into their systems more compared to any other.This can be attributed to the fact that,quality is their value for most of them and reducing on labour costs while improving efficiency is their goal.

There was a significant association between those health units that have managed to integrate IT in all departments and their views on the cost of implementation of IT into the health system since we rejected our null hypothesis.They all believe that the cost of implementation is high.Purchase of modern instruments and tools for use within the facility require huge amounts of capital.Installation costs are also included which makes it an all expensive undertaking.

This study also revealed a significant association between integration of IT into the health system and cultures/beliefs.The health facilities that feel there is rarely or no conflict between cultures/beliefs and adoption of technology has integrated IT into all or most departments of their facility as compared to their counterparts who belief otherwise.

This research was able to fill the gap on giving a better understanding and relationships between cultures,cost of implementations and integration of IT into the system.The results contribute to the existing literature and the concerned can use this information to better their decision when adopting technologies. 

Further research should be extended to other parts of America in order to cover a wider scope because this research is limited to only health care units within North America.

Conclusions

IT has positive effect on healthcare system resulting in gaining the competitive advantage but on the other hand, there are few factors like cost of implementation and reluctant to use IT due to cultures/beliefs, which, has negative effect on gaining competitive advantage. This research therefore, evaluated how the two factors affect the gain of competitive advantage in healthcare system.The research questions addressed the relationships between these two factors and integration of the IT into health care system.

Quantitative research design was suitable for this research,the research strategy was a survey utilizing closed -ended questionnaires to collect primary data for analysis.Quantitave method was used for analysis,where descriptives were first carried out to describe the data and then inferential statistics was done to test hypotheses.Chi-square tests were appropriate since the variables were categorical.

The results revealed that was a significant association between those health units that have managed to integrate IT in all departments and their views on the cost of implementation of IT and there was a significant association between integration of IT into the health system and cultures/beliefs.

It was recommended that further research be carried out in other parts of America as our study focused only in North America.  

References 

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Agresti, A. and Kateri, M., 2011. Categorical data analysis. In International encyclopedia of statistical science (pp. 206-208). Springer Berlin Heidelberg.

Bates, D. W. (2000). Using information technology to reduce rates of medication errors in hospitals. BMJ: British Medical Journal, 320(7237), 788–791.

Bates, D. W., & Gawande, A. A. (2003). Improving safety with information technology. New England journal of medicine, 348(25), 2526-2534.

Blaxter, L., Hughes, C., & Tight, M. (1998). Writing on academic careers. Studies in Higher Education, 23(3), 281-295.

Bryman, A. (2015). Social research methods. Oxford university press.

Buntin, M. B., Burke, M. F., Hoaglin, M. C., & Blumenthal, D. (2011). The Benefits Of Health Information Technology: A Review Of The Recent Literature Shows Predominantly Positive Results. Health Affairs, 30(3), 464-471. doi:10.1377/hlthaff.2011.0178

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Competitive advantage. BusinessDictionary.com. Retrieved August 06, 2017, from BusinessDictionary.com website: https://www.businessdictionary.com/definition/competitive-advantage.html

Creswell, J. W. (2013). Research design: Qualitative, quantitative, and mixed methods approaches. Sage publications.

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Ehmke, C. (2008). Strategies for competitive advantage. Niche Markets: Assessment and Strategy Development for Agriculture, 08-13.

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Process as Fine as Brewed Coffee

We have the most intuitive and minimalistic process so that you can easily place an order. Just follow a few steps to unlock success.

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We Analyze Your Problem and Offer Customized Writing

We understand your guidelines first before delivering any writing service. You can discuss your writing needs and we will have them evaluated by our dedicated team.

  • Clear elicitation of your requirements.
  • Customized writing as per your needs.

We Mirror Your Guidelines to Deliver Quality Services

We write your papers in a standardized way. We complete your work in such a way that it turns out to be a perfect description of your guidelines.

  • Proactive analysis of your writing.
  • Active communication to understand requirements.
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We Handle Your Writing Tasks to Ensure Excellent Grades

We promise you excellent grades and academic excellence that you always longed for. Our writers stay in touch with you via email.

  • Thorough research and analysis for every order.
  • Deliverance of reliable writing service to improve your grades.
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