Cost Stickiness and Core Competency: A Note

Using data from Ontario hospitals, we investigate the conjecture that the stickiness of costs will be greater for functions that relate to an organization's core competency. We find that operating costs for a hospital as a whole are sticky. Moreover, we find higher stickiness in costs pertaining to patient care relative to costs in other functions. Indeed, there is no evidence of stickiness in the operating costs of support departments that are peripherally related to a hospital's mission. © CAAA.