Informating the Clan: Controlling Physicians’ Costs and Outcomes1, 2

This research moves beyond directly controlling informated workers through legitimized managerial authority to a better understanding of how to informate autonomous professionals and suggests that a clan can be informed if the principal can improve the perceived legitimacy of the information.

Abstract

Past literature recognizes the power of information technology (IT) to establish greater transparency and in turn the potential for greater control. Theoretical perspectives such as informating and agency theory describe situations whereby legitimized management authority can control goal divergence by implementing information systems to better monitor agents’ behavior and outcomes. But what happens when the principal does not possess legitimacy to impose an agent’s use of information and/or behavioral conformance? This study investigates this situation. Through an action research project, a physicians’ profiling system (PPS) was used to monitor and benchmark physicians’ clinical practices and outcomes resulting in changed practice behaviors in closer congruence with management’s goals. The PPS project represents a successful attempt of a hospital’s management (principal) to "informate the clan" of physicians (agents) to reduce clinical procedural costs and adopt practices benchmarked to produce better outcomes. This research moves beyond directly controlling informated workers through legitimized managerial authority to a better understanding of how to informate autonomous professionals. Emerging insights suggest that a clan can be informated if the principal can improve the perceived legitimacy of the information (the message), legitimize the technical messenger (customized user interface), legitimize the human messenger (boundary spanners and influential clan members), and facilitate an environment where clan-based discussion, using the information provided by the principal, is incorporated into the process of concertive control.