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Healthcare Information Technology Offshoring: Is it on the Radar Screen in the U.S.? Prashant Palvia, University of North Carolina at Greensboro, USA, pcpalvia@uncg.edu Tim Jacks, University of North Carolina at Greensboro, USA, tfjacks@uncg.edu Kevin Lowe, University of North Carolina at Greensboro, USA, kblowe@uncg.edu Hamid Nemati, University of North Carolina at Greensboro, USA, nemati@uncg.edu ABSTRACT Healthcare Information Technology (HIT) is widely regarded worldwide as a way to improve quality of healthcare while reducing its cost. Although the use of information technology (IT) in healthcare is accelerating, the U.S. is still in the early stages of achieving meaningful use of the technology. Stakeholders such as hospitals, medical practices, physicians and consumers face a myriad of issues and concerns related to IT in healthcare. Offshoring of HIT activities have often been associated with advantages such as significant cost savings and higher quality, but pitfalls such as loss of control and threats to security and privacy remain issues of concern. In this study, we target one group of stakeholders: hospitals, and describe preliminary evidence regarding their concerns in healthcare IT and offshoring. We conducted a survey of hospital CEOs and CIOs in the U.S. nationwide. 177 responses were received. Results demonstrate the low diffusion of IT-based outsourcing and offshoring. We also provide some evidence for some of the reasons behind the low penetration. Both healthcare administrators and outsourcing vendors can benefit from these findings by obviating some of the real or perceived concerns. Keywords: Healthcare, Key IT issues, Healthcare Information Technology, IT Management, U.S. Hospitals, CEOs, CIOs Prashant Palvia is Joe Rosenthal Excellence Professor in the Bryan School of Business & Economics at the University of North Carolina at Greensboro. He received his Ph.D. from the University of Minnesota. He works extensively in the field of Global Information Technology Management (GITM) and chairs the annual GITMA world conference. Professor Palvia is the Editor-in-Chief of the Journal of Global Information Technology Management and has published 96 journal articles in such outlets as the MIS Quarterly, Decision Sciences, CACM, CAIS, Information & Management, Decision Support Systems, and ACM Transactions on Database Systems, and over 170 conference articles. He has co-edited four books on Global Information Technology Management. Tim Jacks is a PhD candidate in Information Systems and Operations Management at the University of North Carolina at Greensboro after 18 years of industry experience in IT and management. He has previous publications in Decision Support Systems and Business Process Management Journal as well as in conference proceedings for ICIS, AMCIS, and GITMA. Research interests include IT occupational culture, IT/Business strategic alignment, and electronic health records. He will be joining the faculty of Southern Illinois University at Edwardsville in the department of Computer Management and Information Systems in the Fall of 2012. Kevin B. Lowe is the Burlington Industries Research Excellence Professor at the University of North Carolina at Greensboro where he serves as Head of Department in Business Administration for the Bryan School of Business and Economics. An Associate Editor at The Leadership Quarterly, International Journal of Dependable and Trustworthy Information Systems, and International Journal of Information Security and Privacy, he also serves on the editorial boards of the Journal of Management, Journal of Organizational Behavior, Journal of Leadership and Organizational Studies and the Journal of World Business. Dr. Lowe holds a Ph.D. in Organizational Behavior from Florida International University. Hamid Nemati is an Associate Professor of Information Systems at the Information Systems and Operations Management Department of The University of North Carolina at Greensboro. He holds a doctorate from the University of Georgia. He has extensive professional experience as a consultant with a number of major corporations. His research specialization is in the areas of Decision Support Systems, Data Analytics, Health IT and Information Security and Privacy. His research articles have appeared in a number of prestigious journals. He has widely presented nationally and internationally. Dr. Nemati is the Editor-in-Chief of the International Journal of Information Security and Privacy. Tenth Annual International Daejeon, South Korea P a g e | 58 Smart Sourcing Conference June 28-29, 2012
INTRODUCTION: Healthcare Information Technology (HIT) is widely regarded worldwide as one of the means for improving the quality of healthcare and potentially reducing the cost of care. In particular, the delivery and cost of healthcare have been challenging issues in the United States. Recent U.S. administrations have emphasized the utilization of computers and information technology in streamlining healthcare and reducing its staggering costs. It is estimated that in the United States, approximately 20% of healthcare expenditures are related to the storing, processing, and dissemination of information. While attention to the use of information technology (IT) in healthcare is accelerating, the United States is still in the early stages of achieving meaningful use of the technology. Consequently, various stakeholders such as hospitals, medical practices, physicians and consumers face a myriad of issues and concerns related to IT in healthcare. In this study, we target one group of stakeholders: hospitals, and describe preliminary evidence regarding their concerns in healthcare IT and offshoring. We look at HIT offshoring specifically, as offshoring has often been associated with advantages such as significant cost savings and higher quality, but also has pitfalls such as loss of control and threats to security and privacy. HEALTHCARE INFORMATION TECHNOLOGY: We conducted a survey of hospital CEOs and CIOs in the U.S. nationwide. A total of 177 responses were received. One of the objectives of the survey was the identification of key HIT issues. Based on literature review, consultation with practice experts, and a pilot test, we identified thirty four IT issues of potential concern to hospital executives. This list included two issues related to outsourcing: IT based outsourcing with the country, and IT based offshoring outside of the country. Executives were asked to rate these issues. Based on their responses, the top ten issues as identified by these senior executives are shown in Table 1. What is interesting to observe is that outsourcing and offshoring are not included in the top-ten list. In fact, they are ranked at the very bottom. IT-based outsourcing within the country was ranked at number 33 and IT-based offshoring outside the country was ranked at number 34. These are very surprising and revealing results, as IT-based outsourcing and offshoring are important in almost all areas of industry in the U.S. and many European countries. One plausible explanation is that the U.S. healthcare industry is so far behind in IT implementation that it is still dealing with basic issues and has not had the maturity or skills developed to consider outsourcing in a serious way. There is also silver lining in the knowledge that there is so much more to be explored and both healthcare providers and IT vendors can find fruitful venues for collaboration and mutual benefit. Table 1. The Top Ten Healthcare IT Issues Rank Issue 1 Implementation of electronic medical records 2 Reducing healthcare errors with information technology 3 Change management from paper to electronic medical records 4 Privacy of electronic records 5 Improving quality of care with information technology 6 Quality assurance of electronic records 7 Security of electronic records 8 Health information systems interoperability 9 Decision support systems for hospital units 10 Decision support systems for physicians and clinics Tenth Annual International Daejeon, South Korea P a g e | 59 Smart Sourcing Conference June 28-29, 2012
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