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International Journal of Medical Informatics 97 (2017) 247–260

Contents lists available at ScienceDirect

International Journal of Medical Informatics


journal homepage: www.ijmijournal.com

Social capital and transaction cost on co-creating IT value towards


inter-organizational EMR exchange
Hsin Hsin Chang a,∗ , Chung-Jye Hung b , Ching Ying Huang a , Kit Hong Wong a , Yi Ju Tsai a
a
Department of Business Administration, National Cheng Kung University, Tainan, Taiwan, ROC
b
Department of Surgery, Medical College and Hospital, National Cheng Kung University, Tainan, Taiwan, ROC

a r t i c l e i n f o a b s t r a c t

Article history: This study adopts social capital theory and transaction cost theory to explore the feasibility of an inter-
Received 29 October 2015 organizational cross-hospital electronic medical records (EMR) exchange system, and the factors that
Received in revised form 26 October 2016 affect its adoption. The concept of value co-creation is also used to assess such a system, and its influence
Accepted 28 October 2016
on the performance of participating medical institutes. This research collected 330 valid paper-based
questionnaires from the medical staff of various institutes. The results showed that social interaction ties
Keywords:
and shared vision positively affected medical institutes’ willingness to adopt the EMR exchange system,
Social capital theory
while asset specificity and uncertainty increased the related transaction costs. With a greater willingness
Transaction cost theory
Co-creation
to invest in relation-specific assets and to meet the related transaction costs, this behavior lead to an
Inter-organizational EMR exchange systems increase in medical IT value, as well as better results for the related medical institutes, medical staff, and
patients. Therefore, this study suggests that such institutes encourage their medical staff to participate
in seminars or reunions in order to develop their professional and social networks, and set up clear
schedules and desire for expected effects when introducing the cross-hospital EMR exchange system.
© 2016 Elsevier Ireland Ltd. All rights reserved.

1. Introduction enough information to track patients’ health conditions. As a result,


improving inter-organizational EMR system has become an impor-
Traditionally, medical institutes used paper-based medical tant issue.
records to record patients’ health conditions, which took up a lot of This research aims to discuss the following three questions: (1)
space and may often be unreadable or difficult to locate and share. Could different levels of medical institutes build up their collabora-
However, electronic medical record (EMR) can overcome these tive relationships?, (2) What would be the trade-off between costs
problems, thus increasing the usability of medical records. Accord- and value co-creation when conducting EMR integration among
ing to the report in Taiwan, “2005 Survey on the Status of Medical different medical organizations?, and (3) Has inter-organizational
Record Computerization at Medical Care Institutions Nationwide” EMR actually enhanced the performance of these medical institutes
showed that about 50% of hospitals had already digitalized their or delivered any benefits after integration?
medical records, and 30% of them had conducted clinical documen- Rooted by social capital theory (SCT) and transaction cost
tation integration and made preparations for inter-organizational theory (TCT), this study tries to explore the possible difficul-
exchanges. In 2013, most hospitals in Taiwan are capable of ties that each medical institute may face when introducing an
sharing medical images and reports, hematologic examinations, inter-organizational EMR system. Although past research [1] used
discharge summaries, and outpatient pharmacy records. However, SCT and TCT to examine the factors affecting cross-hospital EMR
such exchanges primarily occur among three hospital levels (i.e., exchanges, it only focused on regional hospitals and medical cen-
medical center, metropolitan hospital, and district hospital), rather ters, where respondents were only taken from IS departments.
than in clinics. Although nearly 59.8% clinics have a certain degree Therefore, following the criteria of Taiwan hospital stratified man-
of computerized EMR, few have achieved the required level of agement, this study included three hospital levels and clinics, and
development. This limited amount of information exchange hin- the research group was expanded as well. Meanwhile, the idea
ders the practice of holistic healthcare because general clinics lack of investment in relation-specific assets was separated from SCT
to see whether a medical institute’s willingness to adopt inter-
organizational EMR has anything to do with the relationships it
∗ Corresponding author. has with other such institutes.
E-mail address: easyhhc@mail.ncku.edu.tw (H.H. Chang).

http://dx.doi.org/10.1016/j.ijmedinf.2016.10.015
1386-5056/© 2016 Elsevier Ireland Ltd. All rights reserved.
248 H.H. Chang et al. / International Journal of Medical Informatics 97 (2017) 247–260

Moreover, prior research mostly focused on discussing the medical professional-oriented information system with computer-
advantages of using EMR [2,3], or examining the views of medical based medical records being used more often than paper-based
staff (i.e. nurses and physicians) with regard to using them [4–9]. ones. (4) Electronic patient records (EPRs): permission for the cross-
However, those valuables were still at the inter-organizational national transmission and global exchange of patient-oriented
EMR level and considered only “internal value creation” rather electronic medical records via the internet. (5) Electronic health
than “external value co-creation”. Therefore, this study adopted the records (EHRs): integration of disease and non-traditional health
novel concept of “co-creation”. A co-creation construct was applied information with the aid of the patients’ participation, not only
in the current work to elevate the inter-organizational level to the storing medical records, but also providing a broader view of an
cross-organizational level. individual’s healthcare data. Although there are some barriers to
Since few studies had examined the use of inter-organizational implementing inter-organizational EMR today, the potential bene-
EMR in Taiwan, or the benefits associated with it, this research fits are still attractive to many medical institutes. For example, EMR
examined the efficiency and effectiveness of inter-organizational systems can help reduce misdiagnoses, unnecessary repetition of
EMR, and its effects on performance with regard to the organization, medical treatments or tests, and unintended drug interactions
staff, and patients. It is expected to be able to present an overall per- [3,14]. It can also simplify and streamline processes in medical prac-
spective of related issues that medical institutes can refer to when tices, offer healthcare practitioners (i.e. physicians, nurses, physical
considering the adoption of an inter-organizational EMR exchange therapists, and public health practitioners) up-to-date information,
system. In order to fill certain gaps in literature, this study applied reduce costly lab findings and diagnosis reports, avoid loss of med-
SCT and TCT to discover the influences of relationships and internal ical reports, and save labor with regard to retrieving, placing, and
costs on adopting an inter-organizational EMR system, as well as transcribing pencil-and-paper-based medical records [15]. How-
the benefits that can be derived doing so. In summary, this work ever, the exchange of EMR is different from the information sharing
has the following four objectives: occurring among other non-medical organizations on the basis of
money.
Inter-organizational EMR exchanges can not only create better
(1) Construct a model using SCT and TCT to investigate whether
performance improvements can be achieved with the use of an medical service quality for users, but also better meet the needs
inter-organizational EMR system. for self-healthcare. As noted before, there are few studies focus-
(2) Examine whether the use of SCT (social interaction ties, norm ing on the issue of inter-organizational EMR exchanges. Most of
of reciprocity, and shared values) could enhance medical insti- the works related to EMR examined the advantages of or barri-
tutes’ investments in relation-specific assets, and subsequently ers to using EMR within an organization. Although Chang et al.
increase the value co-created with the inter-organizational [1] applied social exchange theory and TCT to examine the fac-
EMR system. tors affecting cross-hospital EMR exchanges, their research sample
(3) Examine whether the use of TCT (asset specificity and was rather narrow on certain types of hospitals and respondents.
uncertainty) could increase internal costs when adopting cross- As a result, this study applies SCT and TCT to examine the influence
hospital EMR exchanges, and further decrease co-creating IT of relationship-building and cost-benefit analysis on medical insti-
value. tutes’ cooperative behavior with regard to the exchange of EMR.
(4) Examine whether the value co-created when using an inter-
organizational EMR system could enhance the performance of 2.2. Social capital theory (SCT)
participation in medical institutes.
The social capital literature focuses on three dimensions: struc-
tural, relational, and cognitive [16]. The structural dimension refers
2. Literature review to the overall patterns of relationships among individuals, such
as social interaction ties [17], while the relational dimension
2.1. Electronic medical records (EMRs) pays attention to personal relationships that people have mutu-
ally developed over a history of interactions [18]. The cognitive
Medical records are a transaction record produced during med- dimension is regarded as those resources enabling shared represen-
ical services, which serve as the basis for computing medical tations, interpretations, and systems of meaning among the parties
expenses and also as a source of auxiliary information for med- involved, and the key facets of this may be a shared language, cul-
ical staff [5,10]. In addition to EMR, these were also referred to ture, and vision [18–20].
computer-based patient records (CPR) by IOM in 1997 [11] or elec- The current study extracts a facet from each dimension based
tronic patient records (EPRs)[12]. According to Lorence et al. [12], on Chiu et al. [20], whose research subjects were members of a vir-
EPRs preserve information about an individuals’ lifetime health tual community, to measure the influence of social capital on EMR
status encompassing all forms of health information, and make it exchange environment. This study examines social interaction ties
easier to retrieve a person’s medical history, current medications, (structural dimension), norm of reciprocity (relational dimension)
laboratory test results, and X-ray images. In this study, the term and shared vision (cognitive dimension) as the facets, which are
EMR, as well as CPR and EPR, can all be used to refer to patients’ explained in more detail below.
digitalized medical records. To avoid confusion, this study adopts
the term EMR to include all forms of EMRs and refer to the medi- (1) Social interaction ties: In a medical context, more intensive
cal law in Taiwan, which defines EMR as “the electronic document contacts between medical institutes may help strengthen the
that medical institutes use to create and maintain an individual’s degree of information sharing and the level of cooperation. To
lifetime health status and health care.” fit the context of this research, this study adopts Chiu et al.’s [20]
According to Waegemann [13], the evolution of EMRs can be definition and change the focus members from virtual commu-
divided into five stages: (1) Automated medical records (AMRs): nities to those in medical institutes, and thus redefines social
electronic records, which are printed out for use. (2) Comput- interaction ties as the strength of the relationships, the amount
erized medical records (CMRs): store details of medical cases in of time spent, and the communication frequency among mem-
computer systems that can be printed out with a doctor’s seal bers in different medical institutes.
in order to preserve the traditional paper-based medical records. (2) Norm of reciprocity: Wasko and Faraj [21] defined the norm
(3) Provider-based patient medical records (CMRs): reliance on of reciprocity as a feeling of mutual indebtedness based on
H.H. Chang et al. / International Journal of Medical Informatics 97 (2017) 247–260 249

the behavior that individuals usually give back the bene- (1) Asset specificity: Asset specificity is defined as “the degree to
fits they receive to ensure the continuation of constant and which an asset can be redeployed to alternative uses and by
supportive exchanges. The exchange of medical information alternative users without sacrifice of productive value” [23].
is a type of knowledge sharing among medical staffs, who A specific asset generally has particular purposes or users,
expected the ongoing interchanges of information to improve which cannot be transferred to other transactions and retain
their work efficiency. Generally health organizations are accus- the same value. Different hospital levels may require particular
tomed to sharing information, but the inter-organizational EMR EMR to meet their needs [6]. A small change (e.g. informa-
allows easier flow of information. However, such an inter- tion exchange, system integration, resource sharing) that might
organizational EMR system creates issues regarding patient seem simple when considered in isolation becomes incredi-
privacy, which means that institutes need to closely monitor bly complex when considered in the context of the broader
what is exchanged, and by whom. Therefore, this study adopted tiered network of established system integration initiatives. As
Chiu et al. [20] concept of “norm of reciprocity” to measure the a result, operability challenges within different hospital levels
relational dimension, and define it as a behavior by which dif- arise and the asset-specific costs will rise accordingly. Thus,
ferent medical institutes will anticipate constant knowledge asset specificity in this study is defined as the degree to which
sharing unless the other parties stop this information flow inter-organizational EMR can be redeployed to alternative uses
when participating in medical information exchanges. and by alternative users without sacrifice of productive value.
(3) Shared vision: The notion of shared vision is often used to (2) Uncertainty: Uncertainty may be induced by bounded ratio-
denote shared values and mutual understanding in coopera- nality, information asymmetry, and the danger of opportunism
tive relationships [22]. To strengthen collaboration, a collective [24]. The degree of uncertainty refers to the unpredictable
goal or vision is necessary [17,20]. In this study, shared vision events which could happen during a transaction; the longer a
can be viewed as the extension of the common beliefs which transaction is, the greater the uncertainty is. In TCT, uncertainty
different medical institutes have toward the importance, ade- can be divided into two types: environmental and behav-
quacy, and validity of behaviors, goals, and policies. To achieve ioral. Environmental uncertainty refers to unpredicted changes
this goal, medical institutes have to develop an exchanging sys- in conditions surrounding an exchange behavior [25]. In this
tem and sharing medical information through well-constructed study, environmental uncertainty refers to the unexpected pol-
communication mechanisms. icy or system changes in conditions surrounding a medical
information exchange behavior. Behavioral uncertainty in the
2.3. Transaction cost theory (TCT) TCT framework is conceptualized as the degree of difficulty in
monitoring exchange partners’ contractual performance [26].
Williamson [23] suggested that transaction costs should include The unanticipated and complex character of environmental
direct costs for relationship management and opportunistic costs uncertainty limits decision makers’ understanding of transac-
for decision making. In this study, transaction cost is defined as the tions exactly, thus leading to direct costs related to actions such
costs of running a system, including ex ante costs (i.e. drafting and as information delivery and contract renegotiation. However,
negotiating contracts) and ex post costs (i.e. monitoring and enforc- distinct from general commercial transactions, the exchange of
ing agreements). Teo and Yu [24] further divided transaction costs EMR is primarily conducted by a central authority. Thus medical
into searching costs, monitoring costs, and adapting costs. When institutes do not need to supervise other organizations’ oper-
adopting a new information system, medical institutes need to col- ations. Besides, since these inter-organizational exchanges are
lect medical information, supervise internal operational efficiency, regulated, it is difficult to know the actual willingness of the
and respond to the updated services. As a result, these three costs management or general medical staffs with regard to partici-
may all increase during this process. This study draws on Teo and pating in such actions, which raises problems with regard to
Yu’s basic concept of transaction costs, and redefines it as follows. performance evaluation. Therefore, this study defines behav-
ioral uncertainty as the degree of difficulty in monitoring the
operation of EMR within an organization.
(1) Searching costs: Due to differences with regard to their degree
of EMR development and organization level, each medical 2.4. Investment in relation-specific assets
institute has to search for related EMR information (i.e.,
on other institutes’ EMR adoption, government policies and Wang et al. [27] indicated that relation-specific investments can
regulations, or additional supportive information) from the be divided into three types: dedicated specificity, IT specificity, and
external environment before undertaking inter-organizational process specificity. Dedicated specificity refers to the equipment,
EMR exchanges. human assets, and IT hardware/software that are committed to a
(2) Monitoring costs: To clearly identify the implementation status particular task. To perform well in the future, most medical insti-
of inter-organizational EMR, medical institutes have to dispatch tutes need to upgrade their information system to achieve greater
additional staffs to supervise system operations and carry out interoperability and invest in compatible IT hardware/software and
follow-up maintenance, if needed. The extra time and expenses training staffs to operate it. In this study, dedicated specificity refers
are seen as the monitoring costs in this work. to the inter-organizational. IT specificity is regarded as the online
(3) Adapting costs: In Taiwan, EMR are being developed in order information exchange and partner-specific IT investment. Unlike
to carry out inter-organizational exchanges. Since various lev- dedicated specificity, IT specificity emphasizes information shar-
els of medical institutes will participate in this project, each ing. If an inter-organizational EMR system is in operation, then
organization has to spend time and effort communicating and the related medical institutes should actively invest in exchanging
renegotiating information that is being constantly updated, patient’s medical records with each other via the internet. Process
which leads to the increase of the adapting costs. specificity explains the work routines and interactions between IT
and people. As new technology is developed, most medical insti-
Moreover, in TCT framework, asset specificity and uncertainty tutes are likely to redesign their work procedures so that medical
are the key factors that may affect the development of EMR and may staffs can quickly get used to the new system. However, one pre-
increase transaction costs in future exchanges of medical informa- condition for the success of relation-specific assets that is available
tion. for enough time.
250 H.H. Chang et al. / International Journal of Medical Informatics 97 (2017) 247–260

In Taiwan most medical institutes at various levels run governance layer co-creates value for medical institutes because it
independently. Each of these has their own EMR system, the rela- efficiently redirects the patient flow. It co-creates external value
tionships among academic medical centers, metropolitan hospitals, for patients, since it offers them better medical treatment. In sum,
local community hospitals, and clinics are weak. Since inter- an inter-organizational EMR exchange system can be viewed as a
organizational EMR exchanges require intensive interactions, these platform combining various resources and co-created values that
weak connections may have negative effects on such alliances. cannot be obtained by a single institute. An inter-organizational
Therefore, in this study we redefine investment in relation-specific EMR exchange system can co-create of IT value based on these
assets as the willingness of different medical institutes to invest four layers, thus leading to better outcomes for both the medical
in relation-specific assets (e.g., an inter-organizational EMR sys- institutes and their patients.
tem, available internet technology, and operational skills training)
in the future, and postulate that as long as the transactors, i.e., hos-
pitals and clinics, are willing to enter into long-term contracts of
cooperation and invest in relation specific assets based on the three 2.6. Joint performance
variables of SCT, they could then develop greater trust in each other
and further enhance each other’s performance. The partners in a strategic relationship engage in collective
planning and adopt similar control mechanisms, making it eas-
2.5. Co-creating IT value ier for them to set up joint goals and performance measures [31].
Unlike traditional operational alliances, the performance of strate-
With recent advances in network and communication technolo- gic alliances is measured based on the entire system, rather than
gies, many organizations are transferring their focus to create value the operating returns, costs, profit, and growth of the individual
collectively with their stakeholders through IT, thus raising inter- partners [32]. Since the focal inter-organizational EMR exchange
est in the relationship between IT investment and organizational system has not yet been comprehensively implemented in prac-
performance. This has led to the concept of “value co-creation”, tice, this research sees joint performance as one of its potential
based on the original term of “value creation.” When applying this benefits. In Hillestad et al. [2], such joints benefits are referred to
notion to information systems, Kohli and Grover [28] suggested as organizational (e.g., providing more medical services can pro-
that researchers should focus not only on IT value, but also on duce more profits), group (e.g., medical staffs can reduce the time
value co-creation with regard to IT. For B2B alliances, the nature needed to obtain and view clinical data), and personal (e.g., better
of resource alignment determines the success of value co-creation. patient outcomes) benefits.
Grover and Kohli [29] pointed out that resource alignment illus- With regard to the organizational aspect, the current study uses
trates the full value of certain resources that cannot be achieved operational costs and efficiency to measure performance. By using
by a partner acting on its own. This corresponds to the idea of an the new system, medical institutes can prevent repeated exam-
inter-organizational EMR exchange platform, which requires spe- inations and the need for expensive equipment. This integrated
cific knowledge to be shared among medical institutes to build up system can also reduce the time and effort needed to retrieve med-
valuable patient information. ical records from different medical institutes, so referrals can be
Kauffman et al. [30] used the concept of business network-based conducted in a more effective way, thus decreasing medical errors
value creation to represent the combination of different firms’ capa- [10]. In addition, nursing staffs can reduce the time they need to
bilities to produce and deliver products and services that could not spend arranging medical information, thus raising work satisfac-
be produced by one firm individually. In the medical context, it tion. Finally, with the aim of an inter-organizational EMR exchange
refers to different levels of medical institutes. According to Grover system, patients do not have to travel many places to obtain their
and Kohli [29], there are four layers of value creation that can medical records. They also can obtain better, more complete and
be enabled, expanded, or created by IT. They are the asset layer, continuous healthcare with the support of comprehensive medical
knowledge sharing layer, complementary capabilities layer, and records. Consequently, joint performance in this study is defined as
governance layer. the degree to which shared medical records can increase the effec-
The asset layer focuses on the specific IT hardware and/or tiveness and efficiency of outcomes with regard to the organization,
software or network facilities which are capable of generating medical staff, and patients.
new value inter-organizationally. In a medical context, if an inter- Based on the above discussion, Fig. 1 illustrates the concep-
organizational EMR exchange is available, hospitals can co-create tual framework of this study. This study adopts SCT and TCT to
IT-enabled value by providing their partner medial institutes with explore the feasibility of an inter-organizational cross-hospital
comprehensive examined reports with regard to particular dis- EMR exchange system. Three dimensions of SCT used to delin-
eases. The complementary capability layer emphasizes the use eate the interactions among medical institutes. We assume that
of resources among partners and co-creating value a single part- once relationships have been established, each medical institute
ner cannot achieve on its own. With an inter-organizational EMR may be more willing to invest in the inter-organizational EMR
exchange system, both hospitals and clinics are capable of utiliz- exchange system. Here, we adopt Dyer’s [33] construct of invest-
ing their partners’ medical resources. Therefore, it is possible to ment in relation-specific assets to illustrate this idea. Furthermore,
co-create value by rerouting patients to suitable medical institutes this study uses TCT to examine the possible costs that medical
and also preventing additional costs due to inappropriate health- institutes face when replacing their old EMR systems with the
care, enabling different medical institutes to focus on what they can inter-organizational EMR exchange system. Two dimensions of
do best. As for the knowledge sharing layer, it indicates that shar- transaction costs (i.e., asset specificity and uncertainty) are used
ing information and expertise can facilitate better decision-making to predict the potential expenses with regard to updating these
and strategies that enable the greater co-creation value. By using systems. The right-hand side is the baseline of the model, and here
an inter-organizational EMR exchange system, hospital doctors can we introduce an innovative concept of co-creation, as proposed by
share their professional knowledge about specific diseases with Grover and Kohli [29], to examine whether the value of an inter-
those in clinics. Finally, the governance layer represents a control organizational EMR exchange system can be further co-created if
mechanism to incentivize value co-creation and decrease transac- different levels of medical institutes participate in it. Ultimately, we
tion costs. This layer is said to integrate the knowledge sharing, hope that this model can be used to improve the overall medical
complementary capability, and asset layers [29]. On one hand, the performance that can be achieved by applying this new type of IT.
H.H. Chang et al. / International Journal of Medical Informatics 97 (2017) 247–260 251

Social Capital

Social H1
Interacon
Ties

H2 Investments in
Norm of
Reciprocity Relaon-specific
H3 Assets H6

Shared
Vision

Co-creang H8 Joint
IT Value Performance

Asset
Specificity H4 Transacon Cost
- Searching costs
H7 (-)
- Monitoring costs
- Adapng costs
Uncertainty H5
Transacon cost

Fig. 1. Research Framework.

3. Hypotheses development that opportunistic behavior is reduced, different levels of medical


institutes would increase their trust in each other and are willing
3.1. Social interaction ties and investment in relation-specific to invest more in sustaining their cooperation. Besides, once the
assets (H1) norm of reciprocity is established, each side tends to share infor-
mation voluntarily to achieve mutually beneficial outcomes. For
Social interaction ties are considered as a channel for informa- instance, while hospitals want to utilize information from clinics
tion and resource flows [34], and, thus, people are able to obtain the (i.e., patients’ daily health records) to improve diagnostic accuracy,
resources of others through their social contacts. This study posits clinics may make use of hospitals’ medical records to improve the
that as long as organizations form a social interaction tie, they will quality of patient-care.
have more opportunities to engage in informational sharing and Similar to the idea in H1, medical institutes’ expectations with
knowledge exchange activities. At the same time, the possibility respect to reciprocity will push them to observe other institutes’
of mimetic behaviors is increased, which encourages joint action EMR performance and result in the mimetic motives. Small-scale
in relation to committing relation-specific investments [27]. With institutes that do not have enough resources to update their sys-
more intensive social contacts, medical staffs could get a bigger pic- tems at the very beginning may prefer to follow the leading
ture of new medical issues that are being raised in other medical institutes instead of being the pioneers. Based on this, we can
institutes. infer that medical institutes are more willing to invest in the EMR
When participating in EMR exchanges, different levels of med- exchange system once they know the details of other institutes’
ical institutes are bound to face various adoption problems. investments in this regard. As a result, if medical institutes are to
Institutions with limited resources may be more hesitant to invest employ each other’s valuable information, they need to feel cer-
in the new EMR exchange system. However, if they have good com- tain that the other side will provide them the necessary materials
munication channels, they can examine how other institutes have when needed, as this will then make them more willing to make
dealt with this issue and may then be more willing to make an such exchanges. Therefore, we hypothesize that, with the founda-
investment. Based on these arguments, we infer that once good tion of reciprocal norms among medical institutes, they are better
social interaction ties are built among different levels of medical able to comprehend each other’s EMR development and having a
institutes, they are more likely to share beneficial medical informa- greater willingness to invest in relation-specific assets to support
tion with each other; and this then leads to a greater willingness to further integration (e.g., updating their out-of-date EMR systems,
make relation-specific assets investment in future EMR exchanges. training medical staffs to use the new system, and redesigning the
Consequently, we hypothesize that: related work processes). Consequently, the following hypothesis is
proposed:
H1. Social interaction ties positively influence the investment in
relation-specific assets in medical environments. H2. Norm of reciprocity positively influences the investment in
relation-specific assets in medical environments.
3.2. Norm of reciprocity and investment in relation-specific assets
(H2) 3.3. Shared vision and investments in relation-specific assets (H3)

Having a joint understanding of collaboration can assist in the In this study, shared vision is considered as the collective val-
formation of direct reciprocal norms within a small community ues and goals shared among different levels of medical institutes.
[21]. Chang et al. [1] and Hsieh [10] also supported this idea The core value of medical institutes in Taiwan is patient-oriented
and stated that reciprocal investments can be seen as a trust- medical care. Basically, these organizations embrace the concept of
worthy commitment to decrease opportunistic actions. Provided providing medical staffs with enough accurate information about
252 H.H. Chang et al. / International Journal of Medical Informatics 97 (2017) 247–260

patients’ health conditions. With this shared vision, medical insti- of these factors may lead to frequent adjustments of EMR systems
tutes are expected to give patients adequate healthcare and, thus, in different levels of medical institutes. As a result, such institutes
reduce the use of medical resources. cannot foresee the actual situations of inter-organizational EMR
In exchanging EMR inter-organizationally, medical institutes exchanges, and need to spend considerable time and effort on com-
need to develop the idea of mutual assistance, such as allowing municating or renegotiating new information about EMR.
medical staffs to learn from each other, with the overall goal of Like environmental uncertainty, high levels of behavioral uncer-
saving lives [35]. With this shared vision, each medical institute tainty increase the costs of evaluating the performance of exchange
may be more willing to invest in relation-specific assets. Lower- partners, as noted in TCT research [36]. As for behavioral uncer-
level hospitals, such as local-community hospitals, could then train tainty, TCT views it as arising from the difficulties associated
their medical staffs with the skills needed to use the new system. with monitoring the contractual performance of exchange part-
Finally, when this infrastructure is completed, all of the medical ners [26]. In a medical environment, since the government takes
institutes can redesign their workflows to fit the needs of the inter- control of inter-organizational EMR exchanges, medical institutes
organizational EMR exchange system. Hence, they can achieve the do not have to sign contracts with each other. Nevertheless, this
collective goal of giving each patient comprehensive medical care. phenomenon produces difficulties for each institute concerning
As long as a shared vision exists among medical institutes, it is more perception of their medical staff’s real intentions related to using
likely that they will invest in relation-specific assets to integrate an inter-organizational EMR system. If staffs are forced to make
EMR exchanges, and so is the following hypothesis proposed. changes, the related performance is hard to measure. Therefore, to
solve this behavioral uncertainty with regard to organizations, each
H3. Shared vision positively influences the investment in relation-
medical institute has to devote time and efforts to monitoring their
specific assets in medical environments.
employees, incurring additional costs.
Since inter-organizational EMR exchange spans over different
3.4. Transaction costs and asset specificity (H4)
levels of healthcare, evaluation is difficult and costly. Teo and Yu
[24] argued that uncertainty raises the need of the transacting par-
In this study physical asset represents the EMR systems within
ties to safeguard their contracts to protect themselves and, thus, the
different medical institutes. Previous research assumes that as soon
costs of writing, monitoring and enforcing contracts are expected
as transactors carry out more investments in a particular asset, the
to rise under conditions of greater uncertainty. We thus infer that
transaction costs will be raised. The reason is that organizations
under an uncertain medical environment, the costs of searching,
need to make more efforts to ensure that the mutual communica-
monitoring, and adapting will all rise.
tion and informational exchange that they engage in is successful
[24]. To avoid this, a more complicated governance structure should H5. Environmental and behavioral uncertainties in the medical
be set up to reduce the possible costs that incurred by asset speci- context have positive effects on transaction costs.
ficity [36]. Pilling et al. [37] also concluded that asset specificity
has a significantly positive impact on both ex ante and ex post
transaction costs. 3.6. Investments in relation-specific assets and co-creating IT
This study applies the concept of “within” organizations and value (H6)
posits that the current EMR system may influence the future
setup of an inter-organizational EMR exchange system in a cer- Relation-specific asset investments, such as dedicated assets,
tain way. In order to replace the current EMR system with an IT assets, and process assets, are regarded as ways to maximize
inter-organizational one, medical institutes need to spend time long-run benefits by exploiting and developing the resources of an
and effort to understand the new system, such as figuring out organization. A good IT infrastructure and processes for knowledge
how to implement the new IT structure and make it work with sharing can increase the ability to identify, to confirm, and to exploit
other organizations, collecting information about regulations and the information obtained from partners [38]. Grover and Kohli [29]
policies related to this system, or finding suitable system vendors. noted that the ability of an IT system to collect, store, and analyze
These behaviors are all likely to induce searching costs. Moreover, information and to distribute knowledge provides many chances
when changing to an inter-organizational EMR exchange system, for the co-creation of value. Based on the concept of IT assets, both
the operating process is bound to undergo an initial period of some dedicated and process assets could improve the quality of informa-
instability. To ensure success, the medical institute thus needs to tion sharing; thus, enhance value co-creation. Dyer and Singh [39]
invest much time and effort in monitoring the new system. There- also suggested that relation-specific assets are capable of creating
fore, monitoring costs are raised. In addition, if the new regulations value on condition that high volume exchanges are conducted and
are developed, then the organization also needs to revise its system that opportunism is limited.
to comply with these regulations, producing the adopting costs. In the medical context, as long as medical institutes are willing
Therefore, we conclude that changing EMR systems may lead to to invest in relation-specific assets, they may be more likely to set
various costs, especially when the original system does not support up new technological facilities and train their medical staffs to use
the new one. We thus posit that an asset that is used for a partic- the inter-organizational EMR exchange system. In addition, new
ular medical purpose (e.g., inter-organizational EMR) could have software and hardware are needed for online exchanges of medi-
positive effects on transaction costs when medical institutes try to cal information so that compatible EMR systems can be developed.
modernize their EMR systems by adopting an inter-organizational Working processes also need to be redesigned to reflect changes in
one, as stated in the following hypothesis: the EMR system. However, if such actions are taken, then different
levels of medical institutes can use the inter-organizational EMR
H4. Asset specificity, that is, the inter-organizational EMR exchange system to maximize the co-creation of value. The comple-
exchange system, has a positive effect on transaction costs. mentary medical information provided by other systems can also
increase the medical staffs’ understanding of disease and health-
3.5. Transaction cost and uncertainty (H5) care, leading to a more efficient diagnosis and decision-making
process. We thus posit that:
A survey by the DOH found that the implementation of EMR was
affected by competitive pressure on the Taiwanese medical envi- H6. Investment in relation-specific assets with regard to using
ronment, deficient IT support and unclear government policies. All the inter-organizational EMR exchange system has a positive influ-
H.H. Chang et al. / International Journal of Medical Informatics 97 (2017) 247–260 253

ence on the co-creation IT value among different levels of medical workload can be reduced, the job satisfaction of medical staffs may
institutes also be increased.
With the value that is co-created by using an inter-
3.7. Transaction costs and co-creating IT value (H7) organizational EMR exchange system, patients should be able to
obtain better medical treatment. Taking the referral process with an
Clemons et al. [40] and Malone et al. [41] claimed that infor- inter-organizational EMR exchange system, medical institutes can
mational systems can reduce transaction costs among business immediately transfer patients’ medical records. As a result, patients
associates and change process boundaries and, thus, generating can save time with regard to waiting or traveling time between
competitive advantages that are difficult to imitate [29]. This can different medical institutes.
then raise value, since costs are lower than before. The support for Based on the above discussion, we can assume that as long as
this assumption is that IT is able to facilitate informational inte- the IT values are co-created (e.g., by supporting medical services,
gration and brokerage, as long as it is properly coordinated with strengthening complementary medical information, increasing
partner transactions. In addition, the resulting standards of IT pro- decision making efficiency, and decreasing costs), medical insti-
vide the foundation for better interoperability among organizations tutes should be able to achieve better joint performance.
and allow alliances to achieve greater value at lower costs [30].
H8. An increase in IT value co-creation has positive effects on joint
Likewise, Clemons et al. [42] argued that IT reduces transaction-
performance.
and opportunism-related risks. Consequently, a decrease in trans-
action costs implies that IT has been successfully used, and that
this idea can be extended to suggest that value co-creation has also 4. Methods
been increased.
Continuing from H5 and H6, we assume that most medical insti- This study develops reliable and valid measurements for these
tutes have constructed their own systems, which may present an constructs in order to assess their impacts on the implementation
obstacle with regard to future integration. If these medical insti- of an inter-organizational EMR exchange system in different levels
tutes want to adopt an inter-organizational EMR exchange system, of medical institutes. We use a multi-stage approach to develop the
they may need to spend much time and effort searching for the relevant questionnaire items. Prior studies of EMRs rarely focused
latest information, monitoring the implementation of the system, on medical applications; most of the items were modified to fit
and renegotiating new conditions with both staffs and partners. As the context of the current work. All of these questions are used
a result, the value of the inter-organizational EMR exchange sys- to measure the medical institutes’ relationships with each other,
tem will be lower for these institutes. Based on this logic, we posit EMR implemented conditions, the willingness to use an inter-
that if the transaction costs are high, it is more difficult for med- organizational EMR exchange system, and the joint performance
ical institutes to introduce an inter-organizational EMR exchange between each medical institute.
system, which lowers the potential value that can be co-created by A prior test of the questionnaire was carried out to make sure the
using the related IT. measurement scales and questions were clear, and some modifica-
tions were then made before the final questionnaire was given to
H7. The transaction costs when using inter-organizational EMR
the respondents. The Cronbach’s alpha values in this study ranged
have a negative impact on co-creation IT value among different
from 0.736 to 0.969, while the item-to-total correlations ranged
medical institutes.
from 0.550 to 0.991. Therefore, there are 46 items for construct
measurements and 11 demographic questions in the formal ques-
3.8. Co-creating IT value and joint performance (H8) tionnaire.
Several revisions were made so that the questionnaire was more
Using IT to enable inter-organizational collaboration has been suitable for the medical context of this study. First, the items gath-
shown to cause reductions in transaction, integration, and switch- ering the basic information of the medical institutes were moved to
ing costs [30]. Based on the arguments outlined above, we believe the last part of the questionnaire, along with those on the respon-
that different levels of medical institutes can reduce operating dents’ characteristics. In addition, the definitions of each construct
costs and strengthen their relationship by adopting an inter- were also given so that the respondents could better understand the
organizational EMR exchange system. Further, when those medical focus of each item. Finally, the wording of some items was changed
institutes are strongly connected by a cross-boundary system, the to make them more comprehensible to the respondents.
IT value could be maximized. Ultimately, the co-created value of An interview with five senior doctors was conducted to further
IT will lead to performance improvement among the participating check the validity of the questionnaire. Based on the sugges-
institutes. tions received from these interviewees, the question sequence was
The cost-beneficial characteristics of an inter-organizational changed to achieve a better sense of flow. Items related to the inter-
EMR exchange system can help each medical institute to reduce nal EMR of each medical institute were moved to the first part of
operating costs, and achieve better financial performance. With the questionnaire, while those related to the inter-organizational
shared access to the results obtained from a diverse range of med- EMR system exchange were put in the later part of the survey. In
ical equipment, small-scale medical institutes (i.e., clinics) do not this way it is expected that the respondents were not confused with
need to purchase expensive machines, but can instead just get the regard to the adoption of internal and external EMR.
related reports from large-scale medical institutes (i.e., metropoli-
tan hospitals), also saving time and labor costs with regard to
repeated checkups. 5. Results
For medical-service providers, the co-created IT value of com-
plementary information can be used to make better diagnosis By using a paper-based survey, the formal questionnaires were
decisions. For instance, if clinics can provide continuous reports sent to four levels of medical institutes in Taiwan. The respondents
about patients’ health conditions, then hospital doctors can get were restricted to people who came into contact with medi-
a clearer understanding of their current status, and thus provide cal records in their work, including doctors/physicians, nurses,
more appropriate medical care and reduce errors without spend- administrative staff, information technicians, and other employees.
ing time and effort retrieving medical data. In addition, since their Respondents were asked to rate each item on a seven-point Likert
254 H.H. Chang et al. / International Journal of Medical Informatics 97 (2017) 247–260

scale ranging from 1 (strongly disagree) to 7 (strongly agree). A total ships are supported, with the exceptions that the influence of norm
of 330 valid samples were gathered for further analysis. of reciprocity on relation-specific asset investment is insignificant
As shown in Table 1, most of medical institutes that the respon- (ˇ = 0.003, p > 0.05) and the influence of transaction costs on co-
dents working for were public (44%), belonged to the EMR stage of creating IT value (ˇ= 0.324, p < 0.05) is significant but positive rather
provider-based medical records (32%), and ranked as the academic than negative. Therefore, H2 and H7 are not supported.
medical centers (40%). Approximately 37% of them had imple-
mented EMR for less than three years. Even though most of the
respondents (56%) were not sure about whether the institute they 6. Conclusion and recommendations
are working is participating in the EMR related program of Min-
istry of Health and Welfare (MOHW), however, they were aware 6.1. Discussion
of the importance of implementing EMR. In term of respondent’s
demographics, there were about 77% female respondents and 36% This study applies the idea of social capital to explore whether
of them were aged 25–29 years old. Most of respondents had under- the strength of the relationships among medical staffs has any influ-
graduate education (76%) and served as nurses (58%). Besides, 13% ence on medical institutes’ investment in the inter-organizational
of administrative staff respondents (e.g., the staffs of medical record EMR exchange system. As shown in Table 4, H1 was supported,
department) were included in the formal analysis, because they meaning that the informational stream will become more flu-
also involved in the EMR practice in daily work. Their opinions were ent with stronger interactions among medical staffs in different
important for improving the effectiveness of EMR program, and for medical institutes, giving those organizations enough resources to
the institute to boost the program across the department and the observe the operations of others [46]. Therefore, as long as medi-
hospital. As for their seniority, 22% of respondents had worked for cal staffs in different institutes are able to learn more information
the institute less than one year, 42% had worked for 1–4 years, and about the positive aspects of inter-organizational EMR exchanges,
36% for more than 4 years (including 12% more than 10 years). it is more likely that they will make the related investment in this
According to the reports of Taiwanese National Health Research mutually beneficial system.
Institutes [43], the ratio between medical doctors and nurses is In this study, the norm of reciprocity refers to a constant behav-
0.344. The average age of nurses is 33.77 years old and more than ior of knowledge-sharing which does not end until the other party
half (52.35%) are aged between 25 and 34. Nurses with an under- stops the flow of information. Both Wasko and Faraj [21] and Chang
graduate education occupy 92.9%. Compared to Western countries, et al. [1] viewed this dimension as one of the most important
the demission rate of nurses in Taiwan is high (average 19.94%) and factors for cooperative relationships. However, H2 showed that,
more than half of them with an accumulated experience of nursing in a medical context, this dimension had no significant effect on
work are less than six years. The turnover rate within the first year relation-specific asset investment. The possible reasons for this
is ranged from 8.13%-27.8% [44]. Obviously, our sample distribution might be related to the research context. In previous studies [20,47],
reflects the actual demography of health workers in Taiwan. the research objects were from various backgrounds and may not
have had a basic sense of reciprocity toward each other. For exam-
5.1. Measurement model analysis and discriminant validity ple, members in a virtual community would not have the feeling
analysis of reciprocity until they joined the group. However, for medical
staffs, the concept of reciprocity is an inherent part of their profes-
Table 2 summarizes the descriptive statistics for the ques- sion, which exists even before they start to cooperate. Therefore,
tionnaire items, including mean values (4.404–5.679), standard the norm of reciprocity might not be a major factor that affects
deviations (0.991–1.542), item-to-total correlations (0.540–0.870), the willingness to make relation-specific asset investments in this
average variance extracted (AVE) (0.522–0.933), factor loading context.
(0.620–0.931), Cronbach’s ␣ (0.701–0.937), and composite relia- Shared vision in this work is regarded as the common values
bility (0.573–0.975). All items conformed to the standard, meaning and goals that different levels of medical institutes have. Support
that all correlations between items and their constructs were good. for H3 in the results echoes the findings of previous research, which
Statistically, the convergent validity, internal consistency, and reli- considered that a shared vision is a way to connect members of
ability of each variable were acceptable. The model fit indices, the different groups and improve their cooperative relationships [48].
Chi-square/df in the measurement model (=2.311) is significant Because different levels of medical institutes have different goals
(<3), proving that the observations are consistent with the theo- (i.e., medical centers are supposed to focus on academic research
retical model. The values of other fit indices, such as GFI, AFGI, CFI, and clinics concerning basic treatment), it is important for them to
and RMR, all meet the related criteria set by Hair et al. [45]. have a shared vision to facilitate cooperation. Likewise, when think-
As shown in Table 3, all of the square roots of AVE were greater ing about adopting an inter-organizational EMR exchange system,
than the correlation values they corresponded to. Therefore, the it is better for medical staffs in different organizations to come up
discriminant validity of this measurement model was satisfied. with a common view of this cooperation, such as learning from oth-
ers. With this kind of shared vision, each medical staff is expected
5.2. Hypotheses testing to increase their willingness to make relation-specific asset invest-
ments.
The overall results of the standardized path coefficients, path The significant support found for H4 confirms not only that asset
significances for each construct, and model fit indices were pre- specificity can effectively influence transaction costs but also that
sented in Fig. 2. The chi-square/df = 2.585 met with the criterion this relationship is an important one in a medical context. That
(<3). The other indices for this hypothesized model were good- is to say, when a medical institute is attempting to introduce a
ness of fit = 0.791, adjusted goodness of fit = 0.755, and comparative new inter-organizational EMR exchange system, the original EMR
fit = 0.889. Although these three indexes were lower than the stan- system will become an obstacle. More specifically, three types of
dards, they were close to the minimum values of 0.80, and so are transaction costs can be increased by asset specificity. Take search-
considered accepTable Similarly, because the root mean square ing costs as an example. Medical institutes with a certain-level of
error of approximation (RMSEA) was only slightly higher than the EMR need to spend time and effort in figuring out the differences
standard of 0.08, we again consider that the model has acceptable between their original EMR and the inter-organizational one. In
fit. Fig. 2 also demonstrates that most of hypothesized relation- addition, medical institutes also have to spend considerable time
H.H. Chang et al. / International Journal of Medical Informatics 97 (2017) 247–260 255

Table 1
Information of medical institutes and Respondents (N = 330).

Basic Information of Medical Institutes

Category Number (%)

EMR stage Automated Medical Record 94 28.5


Computerized Medical Record 92 27.9
Provider-based Medical Record 104 31.6
Electronic Patient Record 36 10.9
Electronic Health Record 4 1.2
Rank Clinics 50 15.2
Regional Hospitals 36 10.9
Metropolitan Hospitals 112 33.9
Academic Medical Centers 132 40.0
Type Public 145 43.9
Private 80 24.3
Medical foundation 83 25.2
Medical Corporation 19 5.7
Other 3 0.9
Location North 125 37.9
Midst 45 13.6
South 155 47.0
East 5 1.5
EMR Implementing Year Under 3 years 121 36.7
4–6 years 120 36.4
7–9 years 50 15.2
10–12 years 26 7.9
13–15 years 3 0.9
Above 15 years 10 3.0
Participating in MOHW’s EMR related program Yes 119 36.1
No 25 7.6
Not Sure 186 56.4

Respondent Characteristics

Category Number (%)

Gender Male 75 22.7


Female 255 77.3
Age Under 25 75 22.7
25–29 120 36.4
30–39 87 26.4
40–49 33 10.0
Over 50 15 4.5
Education Degree Senior High 5 1.5
Junior College 50 15.2
Undergraduate 250 75.8
Post-graduated 25 7.5
Professional Title Doctors 47 14.2
Nurses 191 57.9
Administrative staffs 43 13.0
IT- technicians 5 1.5
Others 44 13.3
Seniority Under 1 year 73 22.1
1–2 years 56 17.0
2.1–3 years 49 14.8
3.1–4 years 35 10.6
4.1–5 years 18 5.5
5.1–6 years 12 3.6
6.1–7 years 12 3.6
7.1–8 years 15 4.5
8.1–9 years 8 2.4
9.1–10 years 14 4.2
Above 10 years 38 11.5

and effort in supervising the new system’s operations. Medical that adopt it may spend considerable time and effort on obtaining
institutes which already have individual electronic medical sys- new information and implementing.
tems in each department may find that their medical staffs are The significant support for H5 showed the relationship between
unfamiliar with the particular format of EMR used by the new uncertainty and transaction costs is also positive in a medical con-
system and, thus, data processing errors may be made when the text. In Taiwan, inter-organizational EMR exchanges are relatively
system is first used; this will lead to an increase in monitoring costs. new, and the relevant regulations and policies are being devel-
Finally, medical institutes that have individual electronic medi- oped. In other words, the exchanges that take place within this
cal systems will inevitably face costs with regard to adopting and system remain unstable, making them more costly in terms of time
adapting to the new system. Because inter-organizational EMR is and effort. In addition, each medical institute also confronts inter-
still new to the industry, and relatively unstable, medical institutes nal uncertainty. This behavioral uncertainty is due to the unclear
adoption intentions within organizations. Since EMR exchanges
256 H.H. Chang et al. / International Journal of Medical Informatics 97 (2017) 247–260

Table 2
Summary of Descriptive Analysis.

Construct No. of Item Mean S.D. Item-to-total Factor loading ␣ CR AVE

Social Interaction Ties 4 5.072–4.555 1.422–1.542 0.580–0.781 0.620–0.899 0.825 0.741 0.561
Norm of Reciprocity 2 5.083–5.132 1.235–1.274 0.764–0.764 0.856–0.893 0.866 0.832 0.764
Shared Vision 3 5.306–5.543 0.991–1.148 0.637–0.797 0.695–0.911 0.856 0.814 0.682
Asset Specificity 5 4.404–4.906 1.277–1.510 0.699–0.787 0.746–0.844 0.897 0.848 0.637
Uncertainty – – – – – 0.532 0.521
Environmental uncertainty 2 5.121–5.196 1.076–1.184 0.540–0.540 0.725–0.745 0.701 0.573 0.549
Behavioral uncertainty 3 4.434–4.728 1.306–1.447 0.587–0.757 0.642–0.890 0.823 0.759 0.626
Investment in Relation-specific Assets – – – – – 0.968 0.917
Dedicated specificity 3 4.815–4.966 1.188–1.276 0.792–0.852 0.860–0.913 0.909 0.886 0.771
IT specificity 2 4.917–5.008 1.234–1.237 0.812–0.812 0.880–0.920 0.896 0.874 0.810
Process specificity 2 4.672–5.000 1.161–1.321 0.729–0.729 0.823–0.886 0.843 0.799 0.731
Transaction Cost – – – – – 0.975 0.933
Searching cost 3 4.691–4.923 1.175–1.301 0.798–0.821 0.834–0.904 0.903 0.875 0.755
Monitoring cost 2 4.913–4.996 1.150–1.229 0.820–0.820 0.899–0.911 0.901 0.882 0.820
Adapting cost 3 4.842–4.970 1.164–1.240 0.802–0.854 0.830–0.923 0.918 0.898 0.788
Co-creating IT value 4 5.340–5.492 1.052–1.239 0.812–0.866 0.840–0.910 0.935 0.910 0.783
Joint Performance 8 5.121–5.679 1.104–1.390 0.699–0.830 0.724–0.883 0.937 0.908 0.653

Table 3
Results of Discriminant Validity Analysis.

Variable SIT NR SV AS UC IRA TC CIV JP

SIT 0.749a
NR 0.698*** 0.874a
SV 0.615*** 0.683*** 0.826a
AS 0.642*** 0.464*** 0.424*** 0.798a
UC 0.068 0.100 0.066 0.013 0.722a
IRA 0.584*** 0.419*** 0.351*** 0.680*** 0.031 0.958a
TC 0.569*** 0.383*** 0.426*** 0.685*** 0.062 0.646 0.966a
CIV 0.408*** 0.603*** 0.471*** 0.357*** 0.063 0.341*** 0.395*** 0.885a
JP 0.349*** 0.618*** 0.404*** 0.338*** 0.065 0.332*** 0.349*** 0.679*** 0.808a

Notes: SIT = Social Interaction Ties; NR = Norm of Reciprocity; SV = Shared Vision; AS = Asset Specificity; UC = Uncertainty. IRA = Investment in Relation-specific Assets;
TC = Transaction Cost; CIV = Co-creating IT Value; JP = Joint Performance.
a
Square root of AVE value.
***
p < 0.001.

Fig. 2. Result of the SEM.

are mainly driven by the government, it is difficult to assess the organizational EMR exchange system has not been adopted by all
decision makers’ true intentions in each organization. One of the institutes, there is such considerable environmental and behavioral
concerns is that some top managers may adopt this new system uncertainty associated with it; both of which can raise the related
only because their institutes can receive a subsidy if they do so. In transaction costs.
addition, medical staffs may adopt this system in a passive way and, A new concept of value co-creation was applied in this study
thus, make the performance of the EMR exchange hard to assess. to examine whether interactions among medical institutes could
As a result, medical institutes may need to spend much time and enhance their investments in relation-specific assets and, thus,
effort on switching to the new EMR system. In short, since the inter- increase the value co-created by the inter-organizational EMR sys-
H.H. Chang et al. / International Journal of Medical Informatics 97 (2017) 247–260 257

Table 4
Results of SEM Paths Analysis.

Hypothesis Predictions Standard Coefficients C.R. (t-value) Results

H1 Social Interaction Ties → Investments in Relation-specific Assets 0.330*** 3.972 Supported


H2 Norm of Reciprocity → Investments in Relation-specific Assets 0.003 0.309 Not Supported
H3 Shared Vision → Investments in Relation-specific Assets 0.204* 2.26 Supported
H4 Asset Specificity → Transaction Cost 0.563*** 8.577 Supported
H5 Uncertainty → Transaction Cost 0.231*** 3.495 Supported
H6 Investments in Relation-specific Assets → Co-creating IV value 0.142* 2.229 Supported
H7 Transaction Cost → Co-creating IV value 0.324*** 5.034 Not Supported
H8 Co-creating IV value → Joint Performance 0.820*** 12.82 Supported
*
p < 0.05.
***
p < 0.001.

tem while H6 was proposed to assess this relationship. The result is The other explanation for the lack of support for H7 could be due
significant, meaning that when there is a higher level of investment to the monitoring costs. From H4 and H5, this study showed that
in relation-specific assets (i.e., in the inter-organizational EMR sys- due to asset specificity (i.e., the inter-organizational EMR system)
tem), the inter-organizational EMR exchange system is then able to and uncertainty, medical staffs may initially have problems using
co-create more value. Since the inter-organizational EMR exchange the new system; thus, medical institutes will face additional costs
system serves as an informational platform, which can only suc- related to monitoring their employees. Nonetheless, once medical
ceed by integrating medical records from different levels of medical staffs become familiar with the inter-organizational EMR system,
institutes, a more complete network of relationship can provide it such supervision will become a “guarantee” of IT value co-creation.
with a better foundation. As long as medical institutes are willing Take the knowledge-sharing level of co-creating IT value as an
to invest in this system and the related personnel training, more example. Under certain degrees of supervision, medical institutes
IT value is likely to be created. For example, medical staffs who acquire a security channel that ensures high-quality information
are familiar with this new system can upload and transmit digital- flows, leading to a higher degree of value co-creation. In addi-
ized medical records more efficiently, providing a better foundation tion, following H4 and H5, when medical institutes intend to adopt
for their technical services both inside and outside their organi- the inter-organizational EMR system, they will encounter a chang-
zations. Moreover, if medical institutes can invest more on their ing adoption of the environment, which means they often need to
exchange behavior, it is more likely that they can achieve IT value update the information they use. Therefore, costs are raised. Never-
co-creation. In practice, if medical institutes make more investment theless, such phenomenon will support greater IT value co-creation
in improving the working processes of medical staff with regard to over time.
the inter-organizational EMR system, then the co-created IT value Thus, there are both negative and positive relationships
is likely to increase, while the quality and quantity of knowledge between transaction costs and the co-creation of IT value, and these
sharing can also both rise and, thus, facilitating better diagnoses and relationships change over time. When the inter-organizational EMR
decision-making. In short, if medical institutes make more dedi- system was first adopted, the transaction costs may have nega-
cated specific investments (e.g., in particular equipment), IT specific tive impacts on IT value co-creation but positive impacts shortly
investments (e.g., in online informational exchanges) and process- afterwards. As a result, H7 was not supported. The original English
specific investments (e.g., in working routines), then more value definition of transaction costs emphasized that considerable time
will be co-created. and efforts must be spent by the medical institutes when adopting
One of our research objectives is to examine whether asset the new EMR system. However, in the Chinese version of the ques-
specificity and uncertainty can increase internal transaction costs, tionnaire, transaction costs were defined following the idea that
and thus reduce co-created value. H7 does not have any directly such efforts were voluntary. This difference may have caused some
related support in the literature. In this research, we assume that misunderstandings with regard to H7 for most of the respondents,
once a medical institute has put more time and effort into preparing then leading it to be rejected.
for the implementation of an inter-organizational EMR exchange Joint performance here refers to the degree of effectiveness
system, the co-created value will be limited by any increase in inter- and efficiency of collective medical records, as assessed from the
nal costs, and thus there is a negative relationship between these. perspectives of the organizations, medical staff, and patients. H8
Unfortunately, the results showed that transaction costs have posi- proposes that the inter-organizational EMR exchange system, if
tive effects on co-created IT value. One of the possible explanations successfully implemented, can benefit all these parties. The results
for this phenomenon might be related to the transaction costs’ char- support H8 and indicate that various performance improvements
acteristic concerning time, which will be discussed in more details can be obtained as long as the values of the inter-organizational
below. EMR system are successfully co-created, as explained in more
As noted in relation to H4 and H5, if medical institutes have details below.
to look for information related to the inter-organizational EMR In organizational-level performance, the values co-created by
exchange system in order to deal with the issue of asset speci- inter-organizational EMR exchanges can decrease operational costs
ficity and uncertainty, then this will raise searching costs. Thus, and increase financial efficiency. With regard to the asset layer, the
according to the original H7, these elevated costs would reduce participating institutes can retrieve patients’ records from their
the co-created value. However, as time goes by and the system partners by using the new system. For small-scale medical insti-
becomes more mature, these costs may be transformed into a kind tutes, such as clinics, they can cut unnecessary costs related to
of capital that can further increase co-created IT value. For exam- repeated examinations and purchases of equipment. On the other
ple, if the medical institutes spend more time and effort in finding hand, large-scale medical institutes, such as academic medical cen-
information, they will then obtain a deeper understanding of inter- ters, can obtain medical data from clinics for better diagnoses.
organizational EMR. They can thus engage in more effective data Group-level performance refers to medical staff. With the
processing and have better technical services. implementation of the inter-organizational EMR system, diag-
noses and related decision-making can be accelerated. This is
258 H.H. Chang et al. / International Journal of Medical Informatics 97 (2017) 247–260

aided by the knowledge sharing layer, one of the characteristics tutes, increase the working efficiency of medical staff, and provide
of IT value co-creation. In this exchange platform, doctors can patients with better medical care.
upload their diagnoses and transmit the data both intra- and inter- To sum up, this study examined cooperation with regard to both
organizationally. Therefore, the organization can save additional external relationships and internals costs. Moreover, both SCT and
labor costs with regard to delivering paper-based medical records, TCT were related to the co-creation of IT value and joint perfor-
giving medical staff more time to conduct diagnoses or treatment. mance in order to explore the potential benefits of adopting an
As for patients, with the aid of the inter-organizational EMR inter-organizational EMR exchange system.
exchange system, they can get more complete and continuous
medical treatment based on the co-created IT value. Take the com- 6.3. Managerial implication
plementary capability layer as an example of this. Because the
detailed records of the patients are digitalized and shared on-line, This research explored how the collective benefits of using an
medical institutes can quickly retrieve medical records throughout inter-organizational EMR exchange system could be obtained by
the system. As a result, patients do not have to go back and forth strengthening relationships and mitigating the influence of internal
between different medical institutes in order to get access to their costs on the adoption of the new system. This section explains the
medical records. In short, by adopting the inter-organizational EMR managerial implications of the results.
system various types of IT value could be co-created for medical First of all, because the results rated to the SCT confirmed the
institutes. In addition, these values can have positive influences on positive relationship between social capital and investments in
all three levels (i.e. organizational, group, and personal) and, thus, relation-specific assets, medical institutes should work to estab-
enhancing the joint performance of medical institutes. lish stronger links with other levels of medical organizations. For
instance, directors in large-scale medical centers should encour-
6.2. Theoretical implications age their medical staff to participate in seminars or academic
reunions so that they can learn more from others at other institutes.
This work combined SCT and TCT to observe the barriers medical As for physicians in small-scale clinics, they should join profes-
institutes might confront when introducing an inter-organizational sional associations to keep in touch with other medical staff. As for
EMR exchange system. In previous studies [18,20,24,39,49], these administrative personnel, such as those in medical records units
two theories are usually discussed independently, resulting in an or informational management divisions, they should also establish
incomplete view of cooperation. In our research context, neither relationships with staff in other medical institutes so that they can
SCT nor TCT can be omitted, because different medical institutes learn about new development in their areas of expertise.
will be needed in the innovative inter-organizational system to Secondly, both asset specificity and uncertainty were found
provide information; significant changes with regard to internal to have positive relationships with transaction costs. However,
expenses in needed in the system as well. As a result, this research because all of the research objects in this study were medical insti-
combined these two theories to examine clearer about the inter- tutes that had already adopted certain forms of EMR, it is inevitable
organizational relationships and costs with regard to adopting this that they will face some costs when switching to the new sys-
new system. By doing so, this research can consider both inter- tem. That’s why our practical suggestions focus on the aspect of
nal and external factors that might influence the adoption of the uncertainty as follows.
inter-organizational EMR exchange system. Among the items related to behavioral uncertainty, most of
The results of this study indicated that SCT, including the tie the respondents stated that top managers’ true intentions are
of social interaction and shared vision, could effectively increase difficult to ascertain (mean = 4.742). In order to reduce this uncer-
medical institutes’ investments in relation-specific assets and sub- tainty, managers in medical institutes should spend more time
sequently enhance the co-created value of the inter-organizational explaining their attitudes toward EMR adoption. For each phase
EMR exchange system. In other words, the results showed that of EMR adoption, such efforts should involve at least the follow-
the relationships among different levels of medical institutes could ing three elements: (1) motive: explanation of the purpose of
have positive effects on co-creating value, such as by providing adopting/upgrading the EMR system; (2) target: establishment of
supportive IT services or complementary information. short-term, medium-term, and long-term targets for medical staff
As for the TCT, the beginning of this research was assumed that to achieve; and (3) anticipated effects: the list of possible outcomes
transaction costs, including the concepts of asset specificity and so that medical staff could know what they are striving for.
uncertainty, could raise internal costs; then leading to a reduc- This research was conducted to explore the influences of SCT
tion in co-created value. Nevertheless, the results revealed that and TCT on adopting a cross-hospital EMR exchange system and
transaction costs had a positive relationship with value co-creation, the effects of co-created value on each medical institute joint per-
although time is a factor here. On the one hand, transaction costs formance. Due to the forecasting characteristics of this study, we
could have negative effects on co-created value, especially at the only offer suggestions for the first part of our framework, which is in
start of the implementation process. However, more such costs the period before adopting the inter-organizational EMR exchange
indicate that an organization is investing more time and effort in system.
adopting the new system, and this may eventually lead to better
outcomes. 6.4. Limitations and directions for future research
Finally, this study extended the concept of IT value co-creation.
By linking IT value co-creation and joint performance, the con- There are a number of several limitations in this study.
cept of value co-creation was clarified. As noted before, value Firstly, although the research scope included four-leveled medi-
co-creation in previous studies is a recent concept developed from cal institutes (i.e., medical centers, metropolitan hospitals, regional
value creation. In order to present the ultimate benefits co-created hospitals and clinics), however, the proportion of clinics (15.0%) and
by the inter-organizational EMR exchange system, this research regional hospitals (12.7%) together accounted for less than a quarter
added the structure of joint performance. Most importantly, this of the whole sample; moreover, they were 22% of the respondents
research also provided a questionnaire of value co-creation that who seniority has less than one year was included in the formal
can be used by future studies. The results indicated that the var- analysis. These respondents’ attributes may present a bias against
ious forms of value co-created by the inter-organizational EMR the results. Future research should involve more types of medical
exchange system can enhance the practices of medical insti- institutes, such as district public health centers, a list of institute
H.H. Chang et al. / International Journal of Medical Informatics 97 (2017) 247–260 259

names should also be obtained from the DOH to ensure greater and desire for expected effects when introducing the cross-hospital
accuracy with regard to the responses, as well as to control over EMR exchange system.
the respondents’ seniority in the model to avoid bias against the Originality/value
hypothesis testing results. This study combined social capital theory (SCT) with transac-
Secondly, due to the anticipated characteristic of this study, tion cost theory (TCT) to explain the influences of relationships and
the overall performance of the inter-organizational EMR exchange internal costs on adopting an inter-organizational EMR system.
system may not have been presented in our results. It should
be considered in the future research concerning extending the Conflict of interest
research period in order to observe the effects before and after
adopting the inter-organizational EMR system, as the results would There are no known conflicts of interest.
then be more complete and closer to reality.
The third limitation is that the results for the full model fit in this Authorship contributions
study are slightly lower than the related standards, and that one
reason for this situation may be the long questionnaire. Since most Hsin Hsin Chang, Chung-Jye Hung, Ching Ying Huang, Kit Hong
medical staffs were busy at work, they did not have much time to Wong, Yi Ju Tsai have made substantial contributions to all of the
complete the questionnaire. Future researchers should thus design following: (1) The conception and design of the study, or acquisition
a shorter questionnaire, if possible. In addition, although the issues of data, or analysis and interpretation of data, (2) Drafting the article
of confidentiality and patient privacy are regarded as important or revising it critically for important intellectual content, (3) Final
factors in the adoption of EMR [3], this study did not take them approval of the version to be submitted.
into consideration. In conclusion, researchers who are interested in
this subject could extend the range of research objects or include
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