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

Ricardo Gonçalves*, Pedro Pita Barros

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

12 Citations (Scopus)

Abstract

This article 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.
Original languageEnglish
Pages (from-to)415-433
Number of pages19
JournalApplied Economics
Volume45
Issue number4
DOIs
Publication statusPublished - Feb 2013

Keywords

  • Clinical services
  • Economies of scale
  • Economies of scope
  • Hospitals
  • Translog cost function

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