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http://dx.doi.org/10.4332/KJHPA.2004.14.1.089

Cost Driver Analysis in General Hospitals Using Simultaneous Equation Model and Path Model  

양동현 (인제대학교 보건대학원 병원경영학과, 병원전략경영연구소)
이원식 (아산의료원 기획조정실)
Publication Information
Health Policy and Management / v.14, no.1, 2004 , pp. 89-120 More about this Journal
Abstract
The purpose of this empirical study is to test hypotheses in order to identify the cost drivers that drive indirect costs in general hospitals in Korea. In various cases' studies, it has been suggested that overhead costs are driven by volume and complexity variables, how they are structurally related and how the cost impacts of these variables can be A unique feature of the research is the treatment of complexity as an endogenous variable. It is hypothesized that level of hospital complexity in terms of the number of services provided(i.e., “breath" complexity) and the intensity of individual estimated in practice. overhead services(ie., “depth" complexity) are simultaneous determined with the level of costs needed to support the complexity. Data used in this study were obtained from the Database of Korean Health Industry Development Institute, Health Insurance Review Agency and analyzed using simultaneous equation model, path model. The results found those volume and complexity variables are all statistically signi-ficance drivers of general hospital overhead costs. This study has documented that the level of service complexity is a significant determinant of hospital overhead costs, caution should be exercised in interpreting this as supportive of the cost accounting procedures associated with ABC. with ABC.
Keywords
Cost Driver; Overhead costs; Volume; Complexity.;
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