Economies of scale in non-revenue producing cost centers: Implications for hospital mergers

David Dranove*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

77 Scopus citations

Abstract

This paper uses semiparametric methods to estimate the magnitude of economies of scale in 14 non-revenue producing cost centers in hospitals. There are substantial economies of scale in small hospitals, but economies are exhausted in hospitals with over 10,000 discharges annually. In recent hospital mergers challenged by federal antitrust agencies, one or both hospitals had over 10,000 discharges, suggesting that efficiency gains in non-revenue producing cost centers will be small, and could easily be offset by nominal price increases.

Original languageEnglish (US)
Pages (from-to)69-83
Number of pages15
JournalJournal of Health Economics
Volume17
Issue number1
DOIs
StatePublished - Jan 1 1998

Keywords

  • Antitrust
  • Hospital mergers
  • Scale Economies

ASJC Scopus subject areas

  • Health Policy
  • Public Health, Environmental and Occupational Health

Fingerprint Dive into the research topics of 'Economies of scale in non-revenue producing cost centers: Implications for hospital mergers'. Together they form a unique fingerprint.

Cite this