The "meaningful use" program is a governmental initiative aimed at influencing electronic health record adoption among hospitals and other providers. The million dollar question (actually, $27 billion) is not whether the meaningful use program will influence EHR adoption, but instead by how much?
Strategic management is about aligning an organization with its changing environment. Environmental changes include shifts in competition, regulation, customer preferences, political will, technology availability and/or economic conditions. For any given organization, environmental changes may serve as either threats or opportunities and can occur at the market level, industry level or societal level. From the perspective of an individual hospital or provider, the meaningful use program is an example of "change" that is occurring at the industry level. Implicitly, anything an organization does in response to the changing environment is a "strategy" being pursed presumably to align the organization with its environment.
From a policy perspective, the monetary incentives in the meaningful use program address the well-documented financial barriers to EHR adoption. However, strategic management theory suggests that organizational strategies (including, for example, EHR adoption) are heavily influenced by the environment and local context of an organization -- not just finances. Failing to address barriers in the environment may unnecessarily attenuate the overall impact of the meaningful use program, which disproportionally addresses financial, and not environmental, barriers.
Influence of the Environment on EHR Adoption
Responding to environmental change is the key to successful strategic management. As such, researchers in this area have been intensely interested in how changes in the environment affect organizational strategy and how strategy affects outcomes. Several researchers have applied this thinking to the study of health IT. For example, Dr. Abby Kazley at the Medical University of South Carolina studied whether certain environmental conditions were antecedents to EHR adoption among a national sample of hospitals. She and her colleague found that hospitals in markets characterized by increased uncertainty -- measured by relatively large fluctuations in historic unemployment rates -- were associated with an increased likelihood of EHR adoption. Kazley's team also found that hospitals in areas with greater availability of human and capital resources (or environmental munificence as referred to by strategic management theory) were more likely to adopt EHRs.
In a separate, yet unpublished, study, my colleagues and I found that the environment also influences hospitals' selection of a health IT adoption strategy. Specifically, we found that certain environmental characteristics (e.g. munificence, level of competition and degree of dynamic change) significantly predicted whether a hospital was pursuing a "best-of-breed," "single-vendor" or "best-of-suite" health IT adoption strategy. This is particularly important because a related study, by Dr. Eric Ford of the University of North Carolina-Greensboro, concluded that the best-of-suite strategy was associated with higher rates of full EHR adoption among hospitals -- raising important implications for which hospitals may be best able to achieve meaningful use in the short run.
There also exists empirical evidence demonstrating how the local context influences EHR adoption in the physician practice market. Dr. Douglas Ayers at the University of Alabama-Birmingham examined EHR adoption and EHR adoption intentions among over 4,000 physicians in Florida. He and his colleagues, including myself, found that the number of specialist (e.g. non-primary care) physicians in a given market who use EHRs significantly influences the number of primary care physicians in that market who are strongly interested in adopting EHRs. Interestingly, EHR adoption among primary care doctors did not influence other primary care doctors' intentions, nor did EHR adoption by specialists influence other specialists' intentions.
Collectively, all of these studies demonstrate that the environment and local context of an organization influences health IT-related strategies among both hospitals and physician practices. However, despite being well intentioned, the meaningful use program disproportionately focuses on financial barriers and not contextual factors that may also influence EHR adoption among organizations.
What Can Provider Organizations Do?
Ultimately, how organizations go about trying to achieve meaningful use should be driven by the strategic situation of the organization and not merely the promise of incentive dollars. Unfortunately, many organizations are frantically gearing up to "cash in" on the attractive incentives available. However, rather than hastily adopting expensive technology for quick short-term gains, organizations should apply strategic management tools to best incorporate the context of their local environment into their strategy for adopting EHR and achieving meaningful use.
Classic strategic management tools help with analyzing the strategic situation. The strategic situation is typically determined by four context-specific factors: external opportunities and threats, and internal strengths and weaknesses. Certain strategic situations may lend themselves better to certain strategies. For example, organizations with highly aggressive growth strategies, limited financial or human resources and/or a relatively volatile service area may find outsourcing a desirable approach. Outsourcing may include utilizing a single vendor approach for the management of their health IT portfolio and/or other consulting services that are most advantageous in strategic situations causing organization leaders to focus their attention externally.
On the other hand, organizations faced with a situation needing defensive strategies (e.g. aimed at retaining market share), those having ample resources and/or those with a relatively stable service area may find that a best-of-suite or best-of-breed approach is best. Organizations in these strategic situations usually focus internally on process improvement and quality enhancement. In such cases, a greater "in house" involvement may be appropriate and the best-of-breed and best-of-suite approach lend themselves to supporting this need.
As is always the case, all organizations should carefully consider how their environments influence their survivability. This awareness should influence the selection of the most appropriate way to support EHR adoption for meaningful use.