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Performance

A hospital’s CPM capability is core to the clinical care process and value creation and previously, we argued that CPM capability is the extent to which CPM functionalities are being used and theorized how it is likely to impact hospital performance. However, it is not just about having a CPM capability, but the rate of growth of a hospital’s CPM capability, individually and in combination with PE and PT capabilities.

The goal of a PE capability is to allow patients to take a more active role in their healthcare, such as being able to receive and keep better track of their recommended care, which in turn reduces costs as patients’ health outcomes may improve as a result. Traditional explanations for

increased hospital performance have pointed to improved clinical processes combined with more patient information (Bates and Bitton 2010; Paulus et al. 2008). However, this provides only a partial explanation and overlooks the speed at which hospitals deploy their CPM capability. Hospitals with high usage of patient engagement have a lot of information being generated for, about, and with the patient. As a hospital ramps up their CPM capability, it runs the risk of overwhelming clinicians and increasing miscommunications and wasted time, thereby reducing hospital performance (Sittig and Singh 2012). We therefore hypothesize the following:

H4a: The curvilinear (U-shaped) relationship between the rate of growth of a hospital’s CPM capability and hospital performance is strengthened with increases in PE capability.

As seen before, PT capability facilitates the communication and coordination of patient information across boundaries (within a hospital and/or across facilities involving multiple providers). Conventional reasons for increased hospital performance suggest that better processes (more CPM functionalities) combined with better handoffs (more PT functionalities) decreases miscommunication and increases coordination of patient care (Coleman et al. 2004; Heart et al. 2017). Yet, that explanation does not consider the rate of growth of a hospital’s CPM capability. If a hospital goes slow in developing their CPM capability and at the same time has patient transition functionalities in place, then increased efficiencies from increased information flows for careful transitioning could indeed increase hospital performance. However, transitioning a patient involves complex coordination from many different parties (Bodenheimer 2008; O’Malley et al. 2010). If a hospital’s CPM capability is ramped up too fast, hospitals run the risk of overburdening clinicians and potentially introducing miscommunications, mismanagement of patients, and clinical errors, all of which decrease hospital performance. Therefore, we hypothesize:

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H4b: The curvilinear (U-shaped) relationships between the rate of growth of a hospital’s CPM

capability and hospital performance isstrengthened with increases in PT capability.

We also expect that the rate of growth of a hospital’s CPM capability will interact with both PE and PT capabilities to affect hospital performance. Our rationale is that while there are greater benefits to be gained from the complementarities of the rate of growth of a hospital’s CPM capability with PE and PT capabilities, there are also greater learning and change management costs associated with using HIT functionalities across three diverse processes. On the benefits side, the more PE and PT capabilities, the greater marginal benefits from the rate of growth of a hospital’s CPM capability because of the synergies in coordinating across these related processes (Hervas-Oliver et al. 2017; Lindbeck and Snower 2000). However, there is the tension of “too much” change that sets in when there are high PE and PT capabilities and CPM capability is ramped up that will decrease the marginal benefits. In sum, the curvilinear relationship between the rate of growth in CPM capability and hospital performance will be reinforced.

H4c: The curvilinear (U-shaped) relationship between the rate of growth of a hospital’s CPM capability and hospital performanceis strengthened with increases in PE and PT capabilities.

3.5.

Empirical Study

3.5.1. Panel Dataset Construction

We test our hypotheses using a merged, multi-source, longitudinal dataset of approximately 5,000 U.S. hospitals from 2008 to 2014. From the AHA Annual Survey IT Supplement, we have the use of HIT functionalities including: electronic clinical documentation, results viewing, computerized provider order entry, decision support, bar coding, patient viewing, secure messaging, summary of care transitions, electronic discharge instructions, and more. From the AHA Annual Survey we have data covering hospital demographics, organizational structure,

hospital expenses, and staffing. From the CMS, we have data on readmission rates of hospitals. The datasets were joined using National Provider Identifiers (NPIs). Taken together, our data spans before and after a major government intervention, providing a unique opportunity to assess how the extent of development and the resulting impacts of HIT capabilities changed over time across hospitals.

Table 3.2: Operationalization of Measures

Construct Operationalization Measure Source

Hospital Performance

Pneumonia Readmission Rate

Risk-standardized, all-cause 30-day

readmission (defined as readmission for any cause within 30 days from the date of discharge of the index admission) rate for patients discharged from the hospital with a principal discharge diagnosis of pneumonia in a given year

CMS

Operating Expense

Total operating expense (payroll expenses, employee benefits, depreciation expense, interest expense, supply expense) of hospital in a given year AHA CPM Capability Extent of Use of CPM

Extent of use of HIT functionalities for CPM of hospital in a given year

AHA Rate of Growth of CPM Capability Rate of Growth of Use of CPM

Extent of use of HIT functionalities for CPM at time t minus extent of use of HIT

functionalities for CPM at time t-1 divided by extent of use of HIT functionalities for CPM at time t-1 of hospital in a given year

Patient Engagement

Capability Extent of Use of PE

Extent of use of HIT functionalities for PE of hospital in a given year

Patient Transition Capability

Extent of Use of PT Extent of use of HIT functionalities for PT of

hospital in a given year

Note: Control for hospital size, hospital ownership, system, trauma level, nursing intensity, percent Medicare days, rural, and year dummies.

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