Abstract

This study examines radiology information system vendors' reactions when competitors secure new contracts, using a unique dataset on US hospitals from 2017–2024 to investigate how IS vendor strategies evolve in response to market signals from competitor adoptions. When information systems vendors observe competitors successfully installing their technology, they could interpret the event in two ways. On one hand, vendors might see such an adoption as a sign that the client is taken and move on to redirect their attention to alternative hospitals or untapped markets. On the other hand, a successful installation may serve as an information update about the technological readiness, managerial priorities, and budget availability of the client. We explore these two opposite outcomes, in the setting of radiology information systems (RIS). These technologies are expensive and are difficult to reverse once installed. A hospital’s decision to adopt an RIS tool is therefore both a financial commitment and a statement of strategic direction. The transparency of competitive activities from federal reporting requirements, such as the Open Payments program, also provides a unique opportunity to study competition. To investigate these dynamics, we construct a hospital–vendor–quarter dataset by combining three sources. We use a proprietary RIS adoption record to identify when a new tool is installed in each hospital. Open Payments data provides information on vendor–physician interactions, including consulting fees, meals, and other transfers which represent strategic investment into educating and pursuing physicians. Finally, CMS National Downloadable file data on Physician Compares provides physicians’ hospital affiliation on quarterly level and allows us to aggregate vendor activity at the physician level to the hospitals where those physicians practice. These physicians are direct users of the RIS tools, and their aggregated decision would be reflected in the final procurement decision. For example, many hospitals have new technology procurement committee which approves proposals from each department. Alternatively, departments have budgets to purchase their software of choice. Aggregating these physician interaction data to the hospital level gives us a clear picture of how vendor outreach intensifies or diminishes around the time of competitor wins. We use difference-in-differences, and we use hospitals where a competitor recently installed an RIS serve as the treatment group, while hospitals without such events serve as controls. The outcome of interest is vendor detailing activity, measured through the frequency of client acquisition activities. The results indicate a significant increase in outreach following competitor installations. Rather than withdrawing from the market, vendors appear to redouble their efforts when a rival achieves a successful sale. This finding supports the view that competitor success provides valuable information about organizational readiness for new technologies. Instead of treating competitor wins as lost opportunities, vendors interpret them as signals of broader market potential. In effect, adoption by one vendor lowers uncertainty for all vendors, encouraging a surge of competitive activity. The findings have implications for management as organizations adopting new information systems become targets of intensified vendor competition, potentially creating first-mover advantages in accessing vendor resources such as the latest AI innovation.

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