Implication of E-Health and IT Governance on Healthcare Expenditure: An Econometrics Approach (Case Study Middle East Countries)

Implication of E-Health and IT Governance on Healthcare Expenditure: An Econometrics Approach (Case Study Middle East Countries)

Seyed Shahabeddin Sadr (Tehran University of Medical Sciences, Tehran, Iran), Seyed Mohammad Hossein Sadr (Department of Management and Accounting, University of Allame Tabataba'I (ATU), Tehran, Iran) and Yazdan Gudarzi Farahani (Faculty of Economics, University of Tehran, Tehran, Iran)
DOI: 10.4018/jhisi.2013040105
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Abstract

This paper analyzes the public healthcare expenditure of Middle Eastern countries in relation to different exogenous explanatory variables, through a panel study involving twelve (12) Middle East countries. More specifically, the study methodology uses panel cointegration, and panel-based error correction models derived from annual data covering the period of 2000 to 2010. The empirical results support a short-run co-integration relationship after allowing for the heterogeneous country effect. The long-run relationship is estimated using a full-modified OLS. The results of a ten-year panel study have been interpreted and commented. The public healthcare expenditure of our countries is explicated to a great extent by the single country GDP. Other strong correlation variables were found also to be statistically significant. The research reveals that e-health programming and e-health governance could lead to a decrease in unnecessary health care expenditure.
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1. Introduction

E-health is one of the most critical assets owned by human beings. It permits us to fully develop our capacities. If this asset erodes or is not developed completely, it can cause physical and emotional weakening, as well as bring about obstacles in the lives of people. The previous connection can be seen as evidenced by the relationship between income and e-health. Studies using life-cycle models have shown how one’s e-health status can determine future income, wealth and consumption (Lilliard & Weiss, 1997; Smith, 1998).

Botha (2012) “E-health is a relatively new field and has no clear definition to date. It was first used in 1999 at the 7th International Congress on Telemedicine and Telecare in London by John Mitchell from Sidney, Australia who spoke about a national government study whose main result was the recognition that “cost-effectiveness of telemedicine and tele-health improves considerably when they are part of an integrated use of telecommunications and information technology in the e-health sector” (pp. 1).

According to Awad Rawabdeh (2007) “e-health as a commercial activity can be schematically conceptualized as four important categories, namely medical equipment and supplies, health insurance, medications and clinical services” (pp. 519).

In this paper, “e-health definition is comprising all of the Information and Communication Technologies (ICT) tools employable in e-care services that link or interface patients with providers of e-health services. E-Care providers include e-health professionals and e-health information covers the transmission of data related to the provision of e-care services between and among institutions. Specific examples include e-prescriptions, e-referrals, e-health information networks, electronic health records, telemedicine services, wearable and portable devices, e-health portals used as informational infrastructure for research and clinical care and many other ICT-based tools that assist in disease prevention, diagnosis, treatment, e-health monitoring and lifestyle management” (Europe's Information Society, 2010; Botha, 2000, pp. 1).

Many people involved in some way with patient and health care would disagree with this claim, since health IT is not always seen as one of the main components of health services, or at least is not perceived to be as crucial as, say, clinical factors. IT in the health sector is commonly regarded as a support tool for people (e.g., caregivers) to help other people (e.g., patients). However, there is an expectation that e-health will become more and more important in the delivery of modern health care, in areas such as preventative and curative health, assistance with mobility, telemedicine and virtual healthcare. E-health is expected to improve the health services delivery in the future, adding values for practitioners, patients and caregivers, researchers and government in different stages of the total health care journey. These expectations are already creating new pressures to ensure the successful delivery of e-health; this can be seen in the implementation of IT governance approaches based on proven best practices, not only to get assurance but also to show how these newer expectations are to be realized (Beratarbide & Kelsey, 2009, pp. 7-8).

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