THE INFLUENCE OF UNCERTAINTY AND GOALS ON THE ACQUISITION OF A HIGH-TECH DURABLE GOOD: THE CASE OF CT SCANNERS

Purpose: While uncertainty has been extensively studied in the context of individual decision-making (Kahneman & Tversky, 1979), it has garnered less attention in the context of organizational decision-making (Bowman, 1980; 1982). To shed light on how goals influence uncertainties in an organizational context, I examined the relationship between goals, uncertainty, and the satisfaction resulting from goal fulfillment within the context of computed tomography (CT) machine acquisitions by hospitals. The process through which imaging machines are acquired substantially influences the cost of healthcare, as Medicare Part B alone spent $3.52 billion on medical imaging in 2006 (GAO, 2008).

Method: A theoretical model of hospital decision-making during the CT acquisition process was constructed using information provided during a series of interviews with radiologists and radiology administrators. This model was tested with field survey data through a pilot survey administered during the 2009 Annual Meeting of the Radiological Society of North America. Radiologists and radiological administrators were asked to rate their goals for their most valuable CT machine, as well as the level of uncertainty that they had about the machine’s ability to fulfill those goals. Respondents were also asked to provide information on how well their goals had been met before and after the acquisition. The goals and uncertainties examined by the survey related to the extent to which the CT machine would maximize revenue, minimize operating costs, improve care, enhance research, and be perceived as technologically excellent.

Result: Hospital satisfaction with the most valuable CT machine was significantly related to the hospital’s reported level of goal fulfillment after the acquisition, but was not significantly related to the change in goal fulfillment pre-versus-post acquisition.  For all goals besides the goal of improving care (for which there was little variation), the stronger the goal, the less uncertainty a hospital perceived it had about a CT machine’s ability to fulfill that goal.

Conclusion: When marketing CT machines or other expensive durable equipment to hospitals, manufacturers should focus on the absolute rather than incremental benefits delivered by the equipment. Likewise, equipment manufacturers should be aware that their customers have less uncertainty about machine attributes tied to strongly held goals.