Management Information Systems Quarterly
Abstract
Hospitals are increasingly investing in healthcare analytics systems to improve the performance of clinical processes and patient care. However, the impact of these investments varies significantly across hospitals. The challenge for hospital managers lies in determining which clinical processes will be most beneficial, how long it will take to see returns, and how long these investments should be sustained. Such uncertainties can make it difficult to assess the returns on analytics investments, potentially slowing down future investments. In this study, we examine when and how analytics investments impact clinical process performance. We introduce the complexity of clinical processes into the discourse on the value of analytics investments. We hypothesize that the magnitude, latency, and trajectory of the performance impacts of analytics investments depend on clinical process complexity, resulting in different return patterns for clinical processes. Analyses of proprietary longitudinal monthly data from 11 U.S. hospitals over a five-year period support our hypotheses. We found that within our observed time frame, analytics investments yielded, on average, nearly 1.75 times (75%) higher returns in clinical process efficiency and 1.93 times (93%) higher returns in clinical process productivity when directed towards high-complexity clinical processes compared to less complex ones; however, these effects took about five times longer to emerge. Our contribution lies in explaining how process complexity shapes the performance impacts of analytics investments that vary over time, when managers can expect such impacts, and whether the impacts will show a rising or declining trajectory. Knowing when and how value from analytics investments emerges is essential for managers to set realistic expectations and to adopt an investment strategy that allocates resources to clinical areas where analytics can be most impactful.