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Economies of scale and scope in the provision of diagnostic techniques and therapeutic services in Portuguese hospitals

Author

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  • Ricardo Gonçalves

    (Faculdade de Economia e Gestão - Universidade Católica Portuguesa [Porto])

  • Pedro P Barros

    (NOVA SBE - NOVA - School of Business and Economics - NOVA - Universidade Nova de Lisboa = NOVA University Lisbon)

Abstract

This paper analyses the provision of auxiliary clinical services that are typically carried out within the hospital. We estimate a flexible cost function for three of the most important (cost-wise) diagnostic techniques and therapeutic services in Portuguese hospitals: Clinical Pathology, Medical Imaging and Physical Medicine and Rehabilitation. Our objective in carrying out this estimation is the evaluation of economies of scale and scope in the provision of these services. For all services, we ...find evidence of economies of scale and some evidence of economies of scope. We also ...find evidence of diminishing returns to management, whereby larger hospitals appear to have surpassed their optimal size. These results have important policy implications and can be related to the ongoing discussion of where and how should hospitals provide these services.

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  • Ricardo Gonçalves & Pedro P Barros, 2011. "Economies of scale and scope in the provision of diagnostic techniques and therapeutic services in Portuguese hospitals," Post-Print hal-00737935, HAL.
    • Handle: RePEc:hal:journl:hal-00737935
    DOI: 10.1080/00036846.2011.605758
    Note: View the original document on HAL open archive server: https://hal.science/hal-00737935
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    1. Sebastian McRae & Jens O. Brunner & Jonathan F. Bard, 2020. "Analyzing economies of scale and scope in hospitals by use of case mix planning," Health Care Management Science, Springer, vol. 23(1), pages 80-101, March.
    2. Kao, Chiang & Pang, Rui-Zhi & Liu, Shiang-Tai & Bai, Xue-Jie, 2021. "Optimal expansion paths for hospitals of different types: Viewpoint of scope economies and evidence from Chinese hospitals," European Journal of Operational Research, Elsevier, vol. 289(2), pages 628-638.
    3. Ricardo Gonçalves & Pedro Pita Barros, 2013. "Economies of scale and scope in the provision of diagnostic techniques and therapeutic services in Portuguese hospitals," Applied Economics, Taylor & Francis Journals, vol. 45(4), pages 415-433, February.
    4. Helda Azevedo & Céu Mateus, 2014. "Cost effects of hospital mergers in Portugal," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(9), pages 999-1010, December.
    5. Monica Giancotti & Annamaria Guglielmo & Marianna Mauro, 2017. "Efficiency and optimal size of hospitals: Results of a systematic search," PLOS ONE, Public Library of Science, vol. 12(3), pages 1-40, March.
    6. Ferreira, D.C. & Marques, R.C. & Nunes, A.M., 2018. "Economies of scope in the health sector: The case of Portuguese hospitals," European Journal of Operational Research, Elsevier, vol. 266(2), pages 716-735.
    7. Galina Besstremyannaya, 2015. "Heterogeneous effect of residency matching and prospective payment on labor returns and hospital scale economies," Discussion Papers 15-001, Stanford Institute for Economic Policy Research.
    8. Barros, Pedro Pita, 2017. "Competition policy for health care provision in Portugal," Health Policy, Elsevier, vol. 121(2), pages 141-148.

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    Keywords

    Social Sciences & Humanities;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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