This paper studies the nature of technical change in Dutch hospitals. From the estimation of a cost function on data in the time period 1993-2000 we conclude that technical change is embodied (input biased) and non-scale augmenting. Technical change leads to an increasing use of medical personnel and material supplies at the expense of nursing personnel. Specifying technical change by a technology index allowing for a shock wise introduction of new technologies is to be preferred to the traditional time trends. Efficiency scores however are hardly affected by the choice of specification.

Cost efficiency, Hospitals, Technical change, Technical efficiency, Technology index,
Quarterly Review of Economics and Finance
Erasmus MC: University Medical Center Rotterdam

Blank, J.L.T, & Lansdorp-Vogelaar, I. (2004). Specifying technical change: A research on the nature of technical change in Dutch hospital industry. Quarterly Review of Economics and Finance, 44(3), 448–463. doi:10.1016/j.qref.2004.05.007