Skip to main content

Business Value of IT in Healthcare

  • Chapter
  • First Online:
Lean Thinking for Healthcare

Part of the book series: Healthcare Delivery in the Information Age ((Healthcare Delivery Inform. Age))

Abstract

With the rapid increase of healthcare expenditures and the parallel increase of doubts about the efficiency of current healthcare systems, due to increasing number of medical incidents and problems, decision- and policy-makers in healthcare industry have started looking for adopting new management practices and strategies to reduce costs and increase healthcare quality, in other words, maximizing the value and minimizing waste. Investing more on information technology has been one of these new strategies. At the same time, lean thinking and Lean Six Sigma promises have been appealing for healthcare, after achieving good results in different industries. However, due to its uniqueness, healthcare industry should have its own definition of “value” as it extends this concept beyond the operational level to cover sociotechnical aspects. Thus, the role that information technology can play to facilitate business value, and later value, in healthcare is discussed in this chapter. Also, lean and Lean Six Sigma in healthcare and their link to business value of IT are to be discussed, on a quest to draw a road map to better IT investments in healthcare to improve value generating in this industry.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 129.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 169.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD 169.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Al-Qirim, N. (2007). Championing telemedicine adoption and utilization healthcare organizations in New Zealand. International Journal of Medical Informatics, 76, 42–54.

    Article  PubMed  Google Scholar 

  • ArticlesBase.com—McMillan. (2009). Two-tier health care. Retrieved November 20, 2011, from http://www.articlesbase.com/health-articles/twotier-health-care-1020480.html

  • American Telemedicine Association. (2009). What is telemedicine? Available online on: http://www.americantelemed.org/learn/what-is-telemedicine. Cited 23 June 2012.

  • Australian Government – Department of Health and Ageing. (2010). Private health insurance. http://www.health.gov.au/internet/main/publishing.nsf/Content/health-privatehealthconsumers-glossary.htm. Cited 15 November 2011.

  • Berghout, B. M., Eminovic, N., de Keizer, N. F., & Birnie, E. (2007). Evaluation of general practitioner’s time investment during a store-and-forward teledermatology consultation. International Journal of Medical Informatics, 76, 384–391.

    Article  Google Scholar 

  • Bharadwaj, A. S. (2000). A resource-based perspective on information technology capability and firm performance: An empirical investigation? MIS Quarterly, 24(1), 169–196.

    Google Scholar 

  • Biermann, E., Dietrich, W., Rihl, J., & Standl, E. (2002). Are there time and cost savings by using telemanagement for patients on intensified insulin therapy: A randomised, controlled trial. Computer Methods and Programs in Biomedicine, 69, 137–146.

    Google Scholar 

  • Bruun, P., & Mefford, R. (2003). Lean production and the Internet. International Journal of Production Economics, 89, 247–260.

    Article  Google Scholar 

  • Bruun, P., & Mefford, R. (2004). Lean production and the Internet. International Journal of Production Economics, 89, 247–260. ISSN: 0925–5273.

    Google Scholar 

  • Bryujolfsson, E. (1993). The productivity paradox of information technology. Communications of the ACM, 36(12), 66–77.

    Article  Google Scholar 

  • Brynjolfsson, E., & Hitt, L. (1996). Paradox lost? Firm-level evidence on the returns to information systems spending. Management Science, 42(4), 541–558.

    Article  Google Scholar 

  • Brynjolfsson, E., & Yang, S. (1996). Information technology and productivity: A review of literature. Advances in Computers, 43, 179–214.

    Article  Google Scholar 

  • Burke, D., & Menachemi, N. (2004). Opening the black box: Measuring hospital information technology capacity. Healthcare Management Review, 29(3), 207–217.

    Article  Google Scholar 

  • Chae, W., et al. (2001). Patient satisfaction with telemedicine in home health services for the elderly. International Journal of Medical Informatics, 61(2–3), 167–173. ISSN: 1386-5056.

    Google Scholar 

  • Chandler, A., Jr. (1962). Strategy and structure: Chapters in the history of the American Industrial Enterprise. MIT.

    Google Scholar 

  • Chen, I. J., Yang, K. F., & Tang, F. I. (2008). Applying the technology acceptance model to explore public health nurses’ intentions towards web-based learning: A cross-sectional questionnaire survey. International Journal of Nursing Studies, 45, 869–878.

    Article  PubMed  Google Scholar 

  • Cheng, C. Y., & Chang, P. Y. (2012). Implantation of the Lean Six Sigma framework in non-profit organisations: A case study. Total Quality Management and Business Excellence, 23(3–4), 431–447.

    Google Scholar 

  • Collis, D. J., & Rukstad, M. G. (2008). Can you say what your strategy is? Harvard Business Review, 86(4), 82–90.

    PubMed  Google Scholar 

  • Das, S., Yaylacicegi, U., & Menon, N. M. (2010). The effect of information technology investments in healthcare: A longitudinal study of its lag, duration, and economic value. IEEE Transactions on Engineering Management, 58(1), 124–140.

    Article  Google Scholar 

  • De Treville, S., & Antonakis, J. (2006). Could lean production job design be intrinsically motivating? Contextual, configurational and levels-of-analysis issues. Journal of Operations Management, 24, 99–123.

    Article  Google Scholar 

  • Dehning, B., & Richardson, V. J. (2002). Returns on investments in information technology: A research synthesis? Journal of Information Systems Management, 16(1), 7–30.

    Google Scholar 

  • Devaraj, S., & Kohli, R. (2003). Performance impacts of information technology: Is actual usage the missing link. Management Science, 49(3), 273–289.

    Article  Google Scholar 

  • Devaraj, S., & Kohli, R. (2003). Information technology payoff in the healthcare industry: A longitudinal study. Journal of Management Information Systems, 16(4), 41–67.

    Google Scholar 

  • DeVol, R., Bedroussian, A., Charuworn, A., Chatterjee, A., Kim, I., Kim, S., et al. (2007). An unhealthy America: The economic burden of chronic disease. Santa Monica, CA: Milken Institute.

    Google Scholar 

  • Fuchs, V. R. (1996). Economics, values, and health care reform. American Economic Review, 86(1), 1–24.

    PubMed  CAS  Google Scholar 

  • Gagnona, M. P., Godinb, G., Gagnéb, C., Fortina, J. P., Lamothec, L., Reinharza, D., et al. (2003). An adaptation of the theory of interpersonal behaviour to the study of telemedicine adoption by physicians. International Journal of Medical Informatics, 71, 103–115.

    Article  Google Scholar 

  • George, M. L. (2003). Lean Six Sigma for services. New York: McGraw-Hill.

    Google Scholar 

  • Glaser, J. P., & Salzberg, C. (2011). The strategic application of information technology in healthcare organizations. San Francisco: Jossey-Bass.

    Google Scholar 

  • Greener, I. (2009). Healthcare in the UK: Understanding continuity and change. Bristol: The Policy Press.

    Google Scholar 

  • Hammer, M. (2001). The superefficient company. Harvard Business Review, 79(8), 82–91.

    PubMed  CAS  Google Scholar 

  • Henderson J., & Venkatraman N. (1993). Strategic alignment: leveraging information technology for transforming organizations. IBM Systems Journal, 32(1).

    Google Scholar 

  • Hines, P., Holweg, M., & Rich, N. (2004). Learning to evolve: A review of contemporary lean thinking. International Journal of Operations & Production Management, 24(10), 994–1011.

    Article  Google Scholar 

  • Hitt, L., & Brynjolfsson, E. (1997). Information technology and internal firm organization: An exploratory analysis. Journal of Management Information Systems, 14(2), 81–101.

    Google Scholar 

  • Institute of Medicine. (2005). Building a better delivery system: A new engineering/health care partnership. Washington, DC: National Academy Press.

    Google Scholar 

  • Institute of Medicine—Committee on Quality of Healthcare in America. (2001). Crossing the quality chasm: A new health system for the 21st century. Washington, DC: National Academy Press.

    Google Scholar 

  • Jones, D., & Mitchell, A. (2006). Lean thinking for the NHS. London: NHS Confederation.

    Google Scholar 

  • Joosten, T., Bongers, I., & Janssen, R. (2009). Application of lean thinking to healthcare: Issues and observations. International Journal for Quality in Healthcare, 21(5), 341–347.

    Article  Google Scholar 

  • Katz-Navon, T., Naveh, E., & Stern, Z. (2007). The moderate success of quality of care improvement efforts: Three observations on the situation. International Journal for Quality in Healthcare, 19, 4–7.

    Article  Google Scholar 

  • Kettelhut, M. C. (1992). Strategic requirements for IS in the turbulent healthcare environment. Journal of Systems Management, 43(6), 6–9.

    Google Scholar 

  • Kling, R. (1980). Social analysis of computing: Theoretical perspectives in recent empirical research. Computing Surveys, 12(1), 61–110.

    Article  Google Scholar 

  • Koning, H. D., Verver, J. P. S., van den Heuvel, J., Bisgaard, S., & Does, R. J. M. M. (2006). Lean Six Sigma in healthcare. Journal for Healthcare Quality, 28(2), 4–11.

    Article  PubMed  Google Scholar 

  • Kostova, A., & Roth, K. (2002). Adoption of organizational practice by subsidiaries of multinational corporations: Institutional and relational effects. Academy of Management Journal, 45, 215–233.

    Article  Google Scholar 

  • Kriebel, C., & Kauffman, R. (1988). Measuring and modeling the business value of information technologies. Washington, DC: ICIT Press.

    Google Scholar 

  • Lawrence (2005). National Academy of Engineering (US) and Institute of Medicine (US) Committee on Engineering and the Health Care System; Reid PP, Compton WD, Grossman JH, et al., editors. Building a Better Delivery System: A New Engineering/Health Care Partnership. Washington (DC): National Academies Press (US); 2005. Bridging the Quality Chasm. Available from: http://www.ncbi.nlm.nih.gov/books/NBK22849/.

  • Markus, M. L., & Robey, D. (1987). Information technology and organizational change: Causal structure in theory and research. Management Science, 34(5), 583–598.

    Article  Google Scholar 

  • Melville, N., Kraemer, K., & Gurmaxani, V. (2004). Review: Information technology and organizational performance: An integrative model of IT business value. MIS Quarterly, 28(2), 283–322.

    Google Scholar 

  • Memon, N. M., Lee, B., & Eldenburg, L. (2000). Productivity of information technology in the healthcare delivery. Information Systems Research, 11(1), 83–92.

    Article  Google Scholar 

  • Mukhopadhyay, T., Kekre, S., & Kalathur, S. (1995). Business value of information technology: A study of electronic data interchange. MIS Quarterly, 19(2), 137–156.

    Article  Google Scholar 

  • OECD. (2010b). OECD health data 2010. http://stats.oecd.org/Index.aspx?DatasetCode=HEALTH. Cited 27 September 2011.

  • OECD. (2010c). OECD-Gesundheitsdaten 2010: Deutschland im Vergleich. http://www.oecd.org/dataoecd/15/1/39001235.pdf. Cited and translated into English 3 October 2011.

  • Osono, E., Shimizu, N., Takeuchi, H., et al. (2008). Extreme Toyota: Radical contradictions that drive success at the world’s best manufacturer. Hoboken, NJ: Wiley.

    Google Scholar 

  • Picker Institute. (2000). Eye on patients: A report by the Picker Institute for the American Hospital Association. Boston, MA: Picker Institute.

    Google Scholar 

  • Piszczalski, M. (2000). Lean vs. information systems. Automotive Manufacturing & Production, 112(8), 26–28.

    Google Scholar 

  • Porter, M., & Teisberg, E. (2006). Redefining health care: Creating value-based competition on results. Boston: Harvard Business School Press.

    Google Scholar 

  • Reid, P. P., & Compton, W. D. (2010). Handbook of healthcare delivery system, Chapter 2. Boca Raton, FL: CRC Press.

    Google Scholar 

  • Ross, J. W., Beath, C. M., and Goodhue, D. L. (1996). Develop long-term competitiveness through IT assets? Sloan Management Review, 38(1), 31–42.

    Google Scholar 

  • Rouse, W. B. (2009). Engineering perspectives on healthcare delivery: Can we afford technological innovation in healthcare? Journal of Systems Research and Behavioural Science, 26(2009), 1–10.

    Google Scholar 

  • Rouse, W. B., & Cortese, D. A. (2010). Engineering the system on healthcare delivery. Amsterdam: IOS Press.

    Google Scholar 

  • Saaty, T. L. (1996). The analytic hierarchy process. Pittsburgh: RWS Publications.

    Google Scholar 

  • Saaty, T. L. (1997). A scaling method for priorities in hierarchical structures. Journal of Mathematical Psychology, 15, 234–281.

    Article  Google Scholar 

  • Savary, L., & Crawford-Mason, C. (2006). The Nun and the Bureaucrat: How they found an unlikely cure for America’s Sick Hospitals. Washington, DC: CC-M Productions.

    Google Scholar 

  • Soh, C., and Markus, M.L. (1995). How IT creates business value: A process theory synthesis. Proceedings of the Sixteenth International Conference on Information Systems (pp. 29–41). Amsterdam, The Netherlands.

    Google Scholar 

  • The Commonwealth Fund. (2010). International profiles of health care systems. http://www.commonwealthfund.org/~/media/Files/Publications/Fund%20Report/2010/Jun/1417_Squires_Intl_Profiles_622.pdf. Cited 3 April 2012.

  • Tolbert, P. S., & Zucker, L. G. (1983). Institutional sources of change in the formal structure of organizations: The diffusion of civil service reform, 1880–1935. Administrative Science Quarterly, 28(1), 22–39.

    Article  Google Scholar 

  • van den Brink, J. L., Moorman, P. W., de Boer, M. F., Pruyn, J. F. A., Verwoerd, C. D. A., & van Bemmel, J. H. (2005). Involving the patient: A prospective study on use, appreciation and effectiveness of an information system in head and neck cancer care. International Journal of Medical Informatics, 74, 839–849.

    Article  PubMed  Google Scholar 

  • Weill, P. (1992). The relationship between investment in information technology and firm performance: A study of valve manufacturing sector. Information Systems Research, 3(4), 307–333.

    Article  Google Scholar 

  • Weill, P., & Broadbent, M. (1998). Levering the new infrastructure: How market leaders capitalize on information technology. Cambridge, MA: Harvard Business School Press.

    Google Scholar 

  • Womack, J., & Jones, D. T. (1996). Lean thinking: Banish waste and create wealth for your corporation. New York, NY: Simon and Schuster.

    Google Scholar 

  • Womack, J. P., & Jones, D. T. (2003). Lean thinking (2nd ed.). New York: Free Press.

    Google Scholar 

  • Young, T., & McClean, S. (2008). A critical look at lean thinking in healthcare. Quality & Safety in Health Care, 17, 382–386.

    Article  CAS  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Nilmini Wickramasinghe Ph.D., M.B.A. .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 2014 Springer Science+Business Media New York

About this chapter

Cite this chapter

Haddad, P., Gregory, M., Wickramasinghe, N. (2014). Business Value of IT in Healthcare. In: Wickramasinghe, N., Al-Hakim, L., Gonzalez, C., Tan, J. (eds) Lean Thinking for Healthcare. Healthcare Delivery in the Information Age. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-8036-5_5

Download citation

  • DOI: https://doi.org/10.1007/978-1-4614-8036-5_5

  • Published:

  • Publisher Name: Springer, New York, NY

  • Print ISBN: 978-1-4614-8035-8

  • Online ISBN: 978-1-4614-8036-5

  • eBook Packages: MedicineMedicine (R0)

Publish with us

Policies and ethics