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Economies of scope in the Norwegian public hospital sector

Author

Listed:
  • Nils Arne Lindaas

    (Norwegian University of Science and Technology)

  • Kjartan Sarheim Anthun

    (Norwegian University of Science and Technology
    SINTEF Digital)

  • Sverre A. C. Kittelsen

    (Ragnar Frisch Centre for Economic Research
    University of Oslo)

  • Jon Magnussen

    (Norwegian University of Science and Technology)

Abstract

This study investigates the potential economies of scope in the Norwegian public hospital sector after a major structural and organizational reform. Economies of scope refers to potential cost savings occurring from the scope of production rather than the scale. We use a data driven approach to distinguish between relatively specialized and differentiated hospitals. Using registry data spanning the period 2013–2019, we use non-parametric data envelopment analysis with bootstrapping procedures to investigate the potential presence of economies of scope. This is done separately for three different dimensions of which hospital production can be either specialized or differentiated. The findings suggest that economies of scope are present in the Norwegian hospital sector, meaning that there are cost savings related to the optimal differentiation of the activity. It is difficult to conclude on how these findings relate to the reform.

Suggested Citation

  • Nils Arne Lindaas & Kjartan Sarheim Anthun & Sverre A. C. Kittelsen & Jon Magnussen, 2025. "Economies of scope in the Norwegian public hospital sector," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 26(2), pages 325-335, March.
    • Handle: RePEc:spr:eujhec:v:26:y:2025:i:2:d:10.1007_s10198-024-01704-z
    DOI: 10.1007/s10198-024-01704-z
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