Cost control and production performance enhancement by IT investment and regulation changes: evidence from the healthcare indust

By using panel data spanning a period of 18 years and by estimating a general cost function in a cost minimization Z .setting, we conducted an analysis of information technology IT investments and production performance in the healthcare industry. The span of years from 1976 to 1994 in the healthcare industry is characterized by major regulatory changes and Z . Zseveral organizational changes such as technological IT and medical advances and structural changes multi-hospital w x .systems MHSs , vertical integration, etc. . This offers a unique setting to study the effect of regulation on the performance of the entire hospital and also of each input factor used in the production of services in the hospital. The cost function approach and the panel data technique allow us to test various hypotheses regarding technical change, substitution, and complementarity effects between IT investments, medical capital investments and labor expenses, and the role of regulation on the cost structure ...

• Type: Journal
• Year: 2000
• Where: DSS
• Authors: Nirup M. Menon, Byungtae Lee
• Keywords: Cost Function, DSS 2000, Healthcare Industry, Panel Data