A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy, School of Management

The purpose of this study is to develop an analytical framework to analyze hospital efficiency and investigate the effects of both size and information technology (IT) on efficiency. Hospital efficiency is essential to the nations seeking to utilize the limited health resources to meet increasing demand for health services while controlling national health spending. Hospital size and information technology (IT) are two major factors that can affect hospital efficiency by their impacts on mechanisms for communication, coordination, and integration of effort across hospitals; improvements in these mechanisms can enhance hospital efficiency in providing health services with existing resources, giving more accurate diagnosis and providing faster services. To analyze the effects of size and IT on hospital efficiency, a conceptual framework was developed based on a linear programming technique, namely Data Envelopment Analysis (DEA), which has been recognized as an appropriate approach to hospital efficiency analysis. The framework consists of three steps: (1) analysis of hospital efficiency, (2) examination of size effects on efficiency, and (3) assessment of IT impacts on efficiency. Hospital efficiency is measured by the DEA technique using benchmarking approach. The effect of size on efficiency is obtained through analyzing the differences in the distribution of the efficiency measures using a non-parametric statistical test, namely, MannWhitney. IT impacts are assessed by the Tobit regression analysis with the DEA measures and IT investments as dependent and independent variables, respectively. Additionally, the proposed framework also aims to evaluate if IT impacts on efficiency are greater for large hospitals compared to small hospitals. Since larger hospitals involve more activities and coordination processes that can be mediated by the use of IT, IT impacts are thus expected to be greater in larger hospitals. The framework is applied to 92 public non-profit hospitals in Thailand. Results indicate that large hospitals significantly operate more efficiently than small hospitals and IT positively contributes to the efficiency for both large and small hospitals. Compared to small hospitals, positive contribution ofIT investment to efficiency is greater for large hospitals. To promote efficient resource usage, policy makers may need to consider mobilizing additional resources from small hospitals to large hospitals that may have higher potential to utilize them. Further, policy makers may need to focus on expanding the size of existing small hospitals rather than increasing the number of small hospitals. Since the use of IT appears to be able to enhance the production mechanism of the hospitals, policy makers aiming at bettering the use of limited health resources should give high priority in the allocation of budget for IT investment. Emphasis may also need to be placed on the training of hospital personnel in order to enable them to effectively utilize IT and thus reaping its full benefits.

Thesis (Ph.D.) - Asian Institute of Technology, 2003