The relationship between health-care organizations and technology vendors: an overlooked factor in telemedicine success

A key aspect of telemedicine projects, the relationship between a health-care organization and an external technology vendor, was examined in a case study. The primary data came from interviews, which were corroborated by project records. Transaction Cost Economics was used to investigate two research questions - one focusing on the evolution of the partnership, the other on agency and governance issues that influenced this relationship. The telemedicine project was an unsuccessful effort to develop a videoconferencing network to serve rural nursing homes. The relationship between researchers and the vendor went through four phases: (1) pre-grant work; (2) the Request for Proposal process and vendor selection; (3) pre-installation planning; and (4) installation and troubleshooting. Throughout the project an information asymmetry caused problems, compounded by a lack of governance mechanisms to ensure vendor performance. The potential of telemedicine to improve health care is clear when projects succeed, but it is through failed projects that researchers and practitioners can learn how to improve their chances of success.