An Empirical Study on the Use of Digital Technologies to Achieve Cost-Effectiveness in Healthcare Management

Objectives: Healthcare cost reduction is one of the major challenges of the current era. This study was based on the general system theory-based view to assess the significance of sensing communication technologies and processing actuation technologies in improving healthcare quality, leading to cost reduction. Moreover, the contingent rule of healthcare supply chain management in enhancing the influence of improved quality on healthcare cost reduction was also empirically tested. Methods: The sample of the study comprised 337 middle and senior healthcare managers employed in various government and private hospitals and health institutions in Jakarta, Indonesia. The administrative departments of each hospital and health institution was visited to take their consent to conduct this survey at their clinical and non-clinical departments. The data collected was analyzed using SmartPLS ver. 4 software. Results: Results reveal a significant direct and indirect influence of sensing communication technologies and processing actuation technologies on achieving cost-effectiveness in the healthcare sector, in the presence of perceived quality improvement as a mediator. However, the strength of the associations varied and was based on highly reliable and familiar nature of sensing communication technologies compared to processing actuation technologies which were emerging and gaining popularity in recent years. Conclusion: Considering the healthcare cost as a critical factor based on limited resources in emerging economies, healthcare institutions/centers should use digital technologies to achieve cost-effectiveness for providing healthcare facilities in the industry 4.0 era.