EXAMINING THE RELATIONSHIP BETWEEN CAPITAL INVESTMENT AND HOSPITAL OPERATING EXPENDITURES.

Anderson, Gerard; Erickson, Jane; Feigenbaum, Susan

Abstract--Recent hospital payment initiatives necessitate a precise estimate of the relationship between hospital capital expenditures and operating costs. Most previous estimates have ignored the possibility that capital and operating costs may be determined simultaneously and that the impact may occur over several years. We estimate several models and show that previous estimates are based upon a specific set of assumptions which should be examined carefully. Our preferred specification estimates a much lower effect of capital expenditures on operating costs than previous models.

CAPITAL investments; HOSPITAL costs; HOSPITALS; PUBLIC spending; PAYMENT; COST; ESTIMATES; OPERATING costs

Review of Economics & Statistics, 1987, Vol 69, Issue 4, p709

0034-6535

Academic Journal

10.2307/1935967