The Estimation Of Cost Function In Ilam Hospitals (2003-2012)

hospital as a firm has got a both income and cost. on other hand, health cost will take a great share of family expenditure. So, the hospitals are obliged to apply and use cost-benefit analysis to increase efficiency and productivity accordingly, these institution managers, have to be aware of hospital cost function. this research try to estimate the regression function of hospital cost based on econometrics method with the help of 14 main index which will affect hospital cost in 8 governmental hospitals of Ilam province during 2003-2013. It worth to mention that Translog function specification has been applied in the estimation. The results indicates that relative cost of Ilam hospital relates to labor -capital price and quantity of production positively during 200/-2013. Besides, since the coefficient are meaningful at a:. 05, so it shows that variables like the emergency rooms, equipments, buildings, bedridden time, releasing and mortality rates has reciprocal effect on hospital cost. 10 percent increase in quality of services leads to 34 percent increase in hospital cost. Discussion and Since there is a direct relationship between quality of services, relative cost of labor and investment and hospital cost so, in order to decrease the hospital cost, one of the following two effective factors including labor force or investment should be decreased. labor force includes the number of nurses, And investment includes equipments, building, and so forth. production decrease has a direct relationship with decrease in number of visited, bedridden, and released patients, and decrease in none of them is acceptable. so the labor relative price decrease can be considered as the best solution for decrease in hospital relative cost which is obtainable via change in condition of labor engagement in hospitals, application of the lowest wage rule, and annual wage increase.