The signs of the coefficients of IT investment are consistently positive. These results imply that hospitals with higher IT investment have higher efficiency. These findings of positive IT influence on hospital efficiency are consistent with Lee and Menon (2000) and Solovy (2001). Compared with small hospitals, IT investment has higher significance for large hospitals. The values of the coefficients for large hospitals when the efficiency is judged within their own group and when the efficiency is judged in the pooled sample ( 0.1090, 0.1218) are slightly higher than those of small hospitals ( 0.0640, 0.0656). These results may tentatively be interpreted to indicate that positive contribution of IT investment to efficiency is greater for large hospitals rather than small hospitals. For both large and small hospitals, the values of the coefficients are smaller when measured within their separate samples compared with when measured within the pooled sample. These results may be interpreted to indicate that partitioning the sample by size is a better way to measure hospital efficiency because it does not muddle size effect with efficiency difference.
6. Conclusions and policy implications
In this paper, the effects of size and IT on efficiency of hospital production are analyzed for public nonprofit hospitals in Thailand. The efficiency measures are estimated by the DEA technique and analyzed with statistical models to assess the effects of size and IT. The results reveal that large and small hospitals appear to have access to and practice the same production technology. However, large hospitals appear to operate more efficiently than small hospitals on average in operating environment of Thailand. Based on the results of size effects and given the resource constraints, policy makers may need to consider mobilizing additional resources from small hospitals to large hospitals that may have higher potential to use them. Further, policy makers may need to focus on expanding the size of existing small hospitals rather than increasing the number of small hospitals. This seems to be a feasible course of action because accessibility is not a concern in the country as overall 90% of Thai people have access to modern health services although people in remote communities may still have less access than in urban areas (AUSAID, 1999). Both large and small hospitals appear to be positively affected by IT. The findings of IT’s positive contribution can help rectify the dearth of empirical evidence on the effects of IT on hospital efficiency in Thailand. Based on these results, the use of IT appears to be able to enhance the production mechanism of the hospitals.