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Advancing Hospital Sustainability: A Multidimensional Index Integrating ESG and Digital Transformation

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  • Takeda, Midori
  • Xie, Jun
  • Kurita, Kenichi
  • Managi, Shunsuke

Abstract

Today, most healthcare costs in Japan depend on insurance premiums and public funds. Since the working population supports both groups, it will be difficult to maintain medical expenses in the future due to further declining birth rates and an aging society. Therefore, the sustainability of hospitals is a serious issue. While many methods have been developed to evaluate hospital performance and effectiveness, only some have been used to evaluate sustainability. Against this background, this study develops a comprehensive evaluation system that integrates ESG and digital transformation (DX) into a hospital efficiency and effectiveness assessment. We utilize open databases on hospital performance, financial reports, and scraped information disclosed on hospital websites. SBM (slack-based model)-DEA and super efficiency SBM-DEA were combined to assess hospital sustainability, including overall sustainability and three dimensions of hospital efficiency, effectiveness, and ESG/DX. The results showed that ESG/DX performance, efficiency, and effectiveness positively correlated with hospital sustainability in all groups of hospitals. It also showed that while effectiveness and ESG/DX performance positively contribute to operational efficiency in smaller hospitals, ESG/DX performance negatively contributes to profitability. In rehabilitation hospitals, effectiveness contributes negatively to profitability, indicating that improving effectiveness requires more significant costs than in other hospitals. These findings indicated that while ESG, DX, and effectiveness improve hospital sustainability, the costs of promoting ESG/DX are significant for smaller and rehabilitation hospitals. This index could benefit hospital management and policy recommendations regarding promoting ESG and DX.

Suggested Citation

  • Takeda, Midori & Xie, Jun & Kurita, Kenichi & Managi, Shunsuke, 2024. "Advancing Hospital Sustainability: A Multidimensional Index Integrating ESG and Digital Transformation," MPRA Paper 119930, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:119930
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    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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