A Transaction Cost Economics Perspective for Pervasive Technology

A Transaction Cost Economics Perspective for Pervasive Technology

Nilmini Wickramasinghe (Epworth HealthCare, Australia & Deakin University, Australia), Indrit Troshani (The University of Adelaide, Australia) and Steve Goldberg (INET International Inc., Canada)
DOI: 10.4018/978-1-4666-9870-3.ch002
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Abstract

Numerous mobile technology solutions are being developed and implemented today to address a myriad of healthcare problems. However, it remains unclear what the true cost/benefit of these solutions is and who benefits from them. To investigate this we apply a transaction cost economics framework to a pervasive mobile solution that has been designed and developed to enhance diabetes self-care. Diabetes is one of the leading chronic diseases and its prevalence continues to rise. The solution examined in this paper relies on pervasive wireless technology and is designed to facilitate the effective management of diabetes in the context of gestational diabetes, a conditions that affects up to 8% of pregnant women. A transactions cost assessment of this solution is provided.
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Background

Diabetes mellitus is one of the leading chronic diseases affecting Australians and its prevalence continues to rise expontially. The total number of diabetes patients worldwide is estimated to rise to 366 million in 2030 from 171 million in 2000 (Wild, Roglic, Green, Sicree, & King, 2004). With increasingly growing prevalence which includes an estimated 275 Australians developing diabetes daily (DiabetesAustralia, 2008), Australia is expected to be a significant contributor to this projected trend. An estimated 700,000 Australians, representing approximately 3.6% of the population, were diagnosed with diabetes in 2004-05. Between 1989-90 and 2004-05 the proportion of Australians diagnosed with this disease more than doubled from 1.3% to 3.3%. Additionally, between 2000-01 and 2004-05, Australian diabetes hospitalizations increased by 35% from 1,932 to 2,608 hospitalizations per 100,000 people (AIHW, 2007, 2008). For every person diagnosed with diabetes, it is estimated that there is another who has yet to be diagnosed, which doubles the number of diabetes sufferers (DiabetesAustralia, 2008). Diabetes is, thus, one of the fastest growing chronic diseases in Australia (AIHW, 2008; Catanzariti, Faulks, & Waters, 2007; Chittleborough, Grant, Phillips, & Taylor, 2007). Diabetes and its complications incur significant costs for the health system in Australia, including costs incurred by carers, government, and the entire health system (DiabCostAustralia, 2002). In 2004-05 direct healthcare expenditure on diabetes was A$907 million, which constituted approximately 2% of the allocatable recurrent health expenditure in that year (AIHW, 2007, 2008). Further costs include societal costs that represent productivity losses for both patients and their carers (DiabCostAustralia, 2002).

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