The local environment matters: Evidence from digital healthcare services for patient engagement

Abstract

The creation and delivery of healthcare services are being transformed through patient-engaging digital services. However, their effects on hospital performance are unclear. We build on the theoretical foundations of resource dependency and environmental munificence to identify two characteristics of the hospital’s regional environment, the population’s access to digital computing resources (computing access) and health insurance coverage (service access), that condition the effects of hospitals’ patient-engaging digital services on patient satisfaction and readmissions. We argue that these omitted environmental contingencies may help explain the inconclusive findings reported in prior empirical studies on digital services. Analysis of data collated from a national sample of 941 hospitals nested within 157 regions shows that computing access in the environment strengthens the effect of a hospital’s digital services on readmissions and patient satisfaction. By contrast, service access dampens the moderated effect of digital services and computing access on readmissions, but the effect is not the same for patient satisfaction. Our study offers theoretical and practical implications underscoring the role of environmental heterogeneity in the value hospitals realize from patient-engaging digital services.