A longitudinal study of economies of scale in the hospital industry.
The Cobb-Douglas production function was used to empirically estimate whether or not larger hospitals have lower long-run average costs per bed than smaller hospitals. The results indicate that economies of scale have evolved recently for non-teaching and teaching hospitals. It is believed that the primary market forces that may be creating economies of scale in the hospital industry are decreasing revenues due to lower reimbursement and lower occupancy rates. As reimbursement and occupancy continue to trend down in the future, hospitals may seek additional economies to survive in an increasingly competitive and shrinking industry.
Yafchak
R
R
Ernst & Young LLP, New York, New York, USA.
D004469:Economics, Hospital / Q000331:legislation & jurisprudence / Q000706:statistics & numerical data*; D017598:Efficiency, Organizational / Q000191:economics; D005161:Facility Regulation and Control / Q000191:economics; D006742:Hospital Bed Capacity / Q000191:economics*; D006784:Hospitals, Teaching / Q000191:economics; D006801:Humans; D008137:Longitudinal Studies; D014481:United States