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Stochastic Demand for Hospitals and Optimizing "Excess" Bed Capacity

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  • Carey, Kathleen

Abstract

This paper addresses the issue of hospital bed capacity by considering the stochastic demand for United States hospitals. An equilibrium condition for the optimal number of "excess" beds is derived and applied using a cost function estimated with a panel data model for the period 1987-1992. Results indicate that it may be difficult to justify the costliness of existing levels of empty hospital beds. The Department of Justice and the Federal Trade commission should be cognizant of the potential effects of hospital mergers on undesirable excess bed capacity. Copyright 1998 by Kluwer Academic Publishers

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  • Carey, Kathleen, 1998. "Stochastic Demand for Hospitals and Optimizing "Excess" Bed Capacity," Journal of Regulatory Economics, Springer, vol. 14(2), pages 165-187, September.
    • Handle: RePEc:kap:regeco:v:14:y:1998:i:2:p:165-87
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    Citations

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    Cited by:

    1. Kathleen Carey, 2000. "Hospital Cost Containment and Length of Stay: An Econometric Analysis," Southern Economic Journal, John Wiley & Sons, vol. 67(2), pages 363-380, October.
    2. C. A. Knox Lovell & Ana Rodríguez‐Álvarez & Alan Wall, 2009. "The effects of stochastic demand and expense preference behaviour on public hospital costs and excess capacity," Health Economics, John Wiley & Sons, Ltd., vol. 18(2), pages 227-235, February.
    3. Tovar, Beatriz & Wall, Alan, 2014. "The impact of demand uncertainty on port infrastructure costs: Useful information for regulators?," Transport Policy, Elsevier, vol. 33(C), pages 176-183.
    4. Sherman T. Folland & Richard A. Hofler, 2001. "How reliable are hospital efficiency estimates? Exploiting the dual to homothetic production," Health Economics, John Wiley & Sons, Ltd., vol. 10(8), pages 683-698, December.
    5. Ana Rodríguez-Álvarez & David Roibás-Alonso & Alan Wall, 2013. "The response of decentralized health services to demand uncertainty and the role of political parties in the Spanish public health system," Journal of Productivity Analysis, Springer, vol. 40(3), pages 357-365, December.
    6. Rodríguez-Álvarez, Ana & Roibás, David & Wall, Alan, 2009. "Factors determining the response of hospitals to demand uncertainty," Efficiency Series Papers 2009/04, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
    7. Rajiv Sharma & Miron Stano & Renu Gehring, 2008. "Short‐term fluctuations in hospital demand: implications for admission, discharge, and discriminatory behavior," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 586-606, June.
    8. Ana Rodriguez‐Alvarez & David Roibás & Alan Wall, 2012. "Reserve Capacity Of Public And Private Hospitals In Response To Demand Uncertainty," Health Economics, John Wiley & Sons, Ltd., vol. 21(7), pages 839-851, July.
    9. Dominic J. Breuer & Shashank Kapadia & Nadia Lahrichi & James C. Benneyan, 2022. "Joint robust optimization of bed capacity, nurse staffing, and care access under uncertainty," Annals of Operations Research, Springer, vol. 312(2), pages 673-689, May.
    10. Alvaro Almeida & Joana Cima, 2015. "Demand uncertainty and hospital costs: an application to Portuguese public hospitals," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(1), pages 35-45, January.

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