Panel data-based study on economy of scale in military hospitals

Author: Jing SUN ¹
Author Information

1. Division of Training
Publication Type:Journal Article
Keywords: Cost and cost analysis; Economies of scale; Military hospitals; Panel data
From: Academic Journal of Second Military Medical University 2010;30(10):1173-1176
CountryChina
Language:Chinese
Abstract: Objective: To measure the economic scale of military hospitals locating to the north of Central China. Methods: We collected the 2005-2007 panel data of 57 military hospitals in 3 different regions, and there were 171 observations. These data were used to estimate the total variable cost function by fixed effected model. The coefficient estimates were used to calculate the economic scale of hospitals of different categories. Results: The general hospitals with 891-1 230 beds showed economy of scale, those with more than 1 300 beds displayed diseconomy of scale. There was no obvious relation between beds and scale economy for the numbered hospitals. Conclusion: Larger market scale and disposition of administrative resources lead to economy of scale on expanded level in the general hospitals. Scale is not the determining factor; optimized allocation of resources, division of labor, and rational specialization are important for economy of scale.