Volume of clinical activity in hospitals and healthcare outcomes, costs, and patient access

Association between outpatient orthopedic surgery costs and healthcare facility characteristics

Purpose The purpose of this paper is to examine the association between outpatient orthopedic surgery costs and Japan's healthcare facilities using a large-scale Japanese medical claims database. Design/methodology/approach The authors obtained reimbursement claims data for 8,588 patients who underwent orthopedic surgery between April 1 and September 30, 2014 at 3,347 Japanese healthcare facilities. Regression analysis, using ordinary least squares, examined the association between outpatient orthopedic surgery costs and healthcare facility characteristics. By using surgical fees as proxy for the surgical costs, the authors defined three dependent variables: surgical cost for each outpatient orthopedic surgery; pre- and post-operative cost one month before and after a surgical operation; and total cost for each patient. The authors also defined five independent variables, which capture healthcare facility characteristics and patient-specific factors: bed count; whether healthcare facilities are reimbursed in a diagnosis procedure combination system; patient's age; sex; and anatomical surgical sites. Findings The authors analyzed 6,456 outpatient orthopedic surgical cases performed at 3,085 healthcare facilities. There were significant differences in the surgical costs for outpatient orthopedic surgery among different healthcare facilities by total beds ( p=0.000). Multivariate regression analysis shows that surgical costs for outpatient orthopedic surgery are positively and significantly associated with healthcare facilities classified by total beds after adjusting for patient-specific characteristics ( p<0.05). Originality/value This is the first research to examine the association between costs for outpatient orthopedic surgery and healthcare facility characteristics in Japan. This study via the multivariate regression method showed that outpatient orthopedic surgery is likely to cost higher as healthcare facility size increased. The average incremental costs for each outpatient orthopedic surgery per 100 beds were calculated at $48.5 for surgery, $40.7 for pre- and post-operative care, and $89.2 total cost.

Variation in the Utilization of Minimally Invasive Surgical Operations

OBJECTIVE

The goal of this study was to examine regional variation in use of minimally invasive surgical (MIS) operations.

SUMMARY BACKGROUND DATA

Regional variation exists in performance of surgical operations. Variation in the use of MIS has not been studied.

METHODS

Five operations that are performed open or MIS were selected: cholecystectomy, appendectomy, colectomy, antireflux, and bariatric. A 3-state database from 2008 to 2011 was used; states were divided into hospital service areas (HSAs). For each operation, the percentage of MIS operations was calculated. HSAs with less than 50% or more than 150% of the MIS average were considered outliers. Population demographics, geography, and hospital and physician presence were compared between HSAs. Rates of performance by patient disease and the presence of MIS surgeons were also investigated.

RESULTS

MIS cholecystectomy was performed with low variation; MIS appendectomy, antireflux, and bariatric operations with medium variation; and MIS colectomy with high variation. With the exception of MIS colectomy, there were no differences in the patient demographics, geography, or disease types treated with an MIS approach between HSAs with low-, non-, or high utilization of MIS. There is no correlation between the number of MIS surgeons and the percentage of procedures performed MIS.

CONCLUSIONS

Variation in utilization of MIS exists and differs by operation. Patient demographics, patient disease, and the ability to access care are associated only with variation in use of MIS for colectomy. For all other operations studied, these factors do not explain variation in MIS use. Further investigation is warranted to identify and eliminate causes of variation.

Patient outcomes vs. service workload: an analysis of outcomes in the burn service of England and Wales

Background

Patient outcomes in specialist burns units have been used as a metric of care needs and quality. Besides patient factors there are service factors that might influence Length of Stay (LOS) and mortality, e.g. pressure on beds. Although the bed needs of UK hospitals have dropped significantly over the past three decades, with changes in policies and practices, recent reports suggest that hospitals have 90% bed occupancy for 48 weeks of the year. In the UK, the specialist burn injury service is organised so that patients are assessed on arrival at hospital, and those needing admission are found a nearby bed in a suitable unit through the National Burn Bed Bureau.

The aim of this study was to investigate the effect on outcomes of service pressures due to shortages of beds.

Methods

We took an extract of the anonymised patient data from the specialised burn injury database, iBID, and created a new database based on matching that data with bed availability data provided by the national Burn Bed Bureau. Cox proportional hazard modelling was used for analysis to investigate if there is an impact of bed occupancy (a proxy measure of workload) on LOS.

Results

Cox proportional hazard modelling indicated that half of the services in England and Wales are less likely to discharge a patient if the bed availability is high. Two of the services have abnormally high bed availability and LOS, therefore a model without these two services indicates a general reluctance to discharge patients when beds are available.

Conclusions

It is possible that the effect we observed is a result of gaming as service providers are paid by the number of admissions. In addition, providers many not all give the same level of accuracy of bed availability information to the NBBB: some may under report availability, for example at times of high pressure on staff. Furthermore, burn services may not empty beds to avoid being filled up by work from other specialties, thus making them unable to admit a burn when referred.

Cost effects of hospital mergers in Portugal

The Portuguese hospital sector has been restructured by wide-ranging hospital mergers, following a conviction among policy makers that bigger hospitals lead to lower average costs. Since the effects of mergers have not been systematically evaluated, the purpose of this article is to contribute to this area of knowledge by assessing potential economies of scale to explore and compare these results with realized cost savings after mergers. Considering the period 2003-2009, we estimate the translog cost function to examine economies of scale in the years preceding restructuring. Additionally, we use the difference-in-differences approach to evaluate hospital centres (HC) that occurred between 2004 and 2007, comparing the years after and before mergers. Our findings suggest that economies of scale are present in the pre-merger configuration with an optimum hospital size of around 230 beds. However, the mergers between two or more hospitals led to statistically significant post-merger cost increases, of about 8 %. This result indicates that some HC become too large to explore economies of scale and suggests the difficulty of achieving efficiencies through combining operations and service specialization.

Perinatal health inequalities and accessibility of maternity services in a rural French region: closing maternity units in Burgundy

Maternity unit closures in France have increased travel time for pregnant women in rural areas. We assessed the impact of travel time to the closest unit on perinatal outcomes and care in Burgundy using multilevel analyses of data on deliveries from 2000 to 2009. A travel time of 30min or more increased risks of fetal heart rate anomalies, meconium-stained amniotic fluid, out-of-hospital births, and pregnancy hospitalizations; a positive but non-significant gradient existed between travel time and perinatal mortality. The effects of long travel distances on perinatal outcomes and care should be factored into closure decisions.

Preoperative physical therapy for elective cardiac surgery patients

BACKGROUND

After cardiac surgery, physical therapy is a routine procedure delivered with the aim of preventing postoperative pulmonary complications.

OBJECTIVES

To determine if preoperative physical therapy with an exercise component can prevent postoperative pulmonary complications in cardiac surgery patients, and to evaluate which type of patient benefits and which type of physical therapy is most effective.

SEARCH METHODS

Searches were run on the Cochrane Central Register of Controlled Trials (CENTRAL) on the Cochrane Library (2011, Issue 12 ); MEDLINE (1966 to 12 December 2011); EMBASE (1980 to week 49, 2011); the Physical Therapy Evidence Database (PEDro) (to 12 December 2011) and CINAHL (1982 to 12 December 2011).

SELECTION CRITERIA

Randomised controlled trials or quasi-randomised trials comparing preoperative physical therapy with no preoperative physical therapy or sham therapy in adult patients undergoing elective cardiac surgery.

DATA COLLECTION AND ANALYSIS

Data were collected on the type of study, participants, treatments used, primary outcomes (postoperative pulmonary complications grade 2 to 4: atelectasis, pneumonia, pneumothorax, mechanical ventilation > 48 hours, all-cause death, adverse events) and secondary outcomes (length of hospital stay, physical function measures, health-related quality of life, respiratory death, costs). Data were extracted by one review author and checked by a second review author. Review Manager 5.1 software was used for the analysis.

MAIN RESULTS

Eight randomised controlled trials with 856 patients were included. Three studies used a mixed intervention (including either aerobic exercises or breathing exercises); five studies used inspiratory muscle training. Only one study used sham training in the controls. Patients that received preoperative physical therapy had a reduced risk of postoperative atelectasis (four studies including 379 participants, relative risk (RR) 0.52; 95% CI 0.32 to 0.87; P = 0.01) and pneumonia (five studies including 448 participants, RR 0.45; 95% CI 0.24 to 0.83; P = 0.01) but not of pneumothorax (one study with 45 participants, RR 0.12; 95% CI 0.01 to 2.11; P = 0.15) or mechanical ventilation for > 48 hours after surgery (two studies with 306 participants, RR 0.55; 95% CI 0.03 to 9.20; P = 0.68). Postoperative death from all causes did not differ between groups (three studies with 552 participants, RR 0.66; 95% CI 0.02 to 18.48; P = 0.81). Adverse events were not detected in the three studies that reported on them. The length of postoperative hospital stay was significantly shorter in experimental patients versus controls (three studies with 347 participants, mean difference -3.21 days; 95% CI -5.73 to -0.69; P = 0.01). One study reported a reduced physical function measure on the six-minute walking test in experimental patients compared to controls. One other study reported a better health-related quality of life in experimental patients compared to controls. Postoperative death from respiratory causes did not differ between groups (one study with 276 participants, RR 0.14; 95% CI 0.01 to 2.70; P = 0.19). Cost data were not reported on.

AUTHORS' CONCLUSIONS

Evidence derived from small trials suggests that preoperative physical therapy reduces postoperative pulmonary complications (atelectasis and pneumonia) and length of hospital stay in patients undergoing elective cardiac surgery. There is a lack of evidence that preoperative physical therapy reduces postoperative pneumothorax, prolonged mechanical ventilation or all-cause deaths.

Cancer patients' concerns regarding access to cancer care: perceived impact of waiting times along the diagnosis and treatment journey

Waiting times can raise significant concern for cancer patients. This study examined cancer patients' concern levels at each phase of waiting. Demographic, disease and psychosocial characteristics associated with concern at each phase were also assessed. 146 consenting outpatients (n= 146) were recruited from two hospitals in Sydney, Australia. Each completed a touch-screen computer survey, asking them to recall concern experienced regarding waiting times at each treatment phase. Approximately half (52%) reported experiencing concern during at least one treatment phase, while 8.9% reported experiencing concern at every phase. Higher proportions of patients reported concern about waiting times from: deciding to have radiotherapy to commencement of radiotherapy (31%); the first specialist appointment to receiving a cancer diagnosis (28%); and deciding to have chemotherapy to commencement of chemotherapy (28%). Patient groups more likely to report concern were those of lower socio-economic status, born outside Australia, or of younger age. Although a small proportion of patients reported very high levels of concern regarding waiting times, the experience of some concern was prevalent. Opportunities for reducing this concern are discussed. Vulnerable groups, such as younger and socio-economically disadvantaged patients, should be the focus of efforts to reduce waiting times and patient concern levels.

Modeling the volume-effectiveness relationship in the case of hip fracture treatment in Finland

Background

A common argument in the recent health policy debate is that treatment is more effective among care providers with large volumes. It is challenging, however, to examine the volume-effectiveness relationship empirically. Several suggestions have recently been made for methodological improvements in the examination of the volume-effectiveness relationship. The aim of this study is to develop an extended methodology for examining the volume-effectiveness relationship and demonstrate it for the case of hip fracture treatment.

Methods

Data consisting of 22,857 hip fracture patients from 52 hospitals in Finland in 1998-2001 were extracted from the administrative registers. The relationship between hospital and rehabilitation unit volumes and effectiveness was examined using a statistical model that allowed risk adjustments and hierarchical modeling of volume trends, developed for the purposes of this study. Four-month mortality and the alternative register-based measure of maintainability were used as effectiveness indicators.

Results

No clear relationship was found between hospital volume and the effectiveness of hip fracture treatment, but a novel result showing an association between the rehabilitation unit volume and effectiveness was detected. The face validity of the maintainability indicator seemed to be acceptable.

Conclusions

The methodological ideas presented allow for improved examination of the volume-effectiveness relationship. There are no indications that patients with hip fractures should only be treated in high-volume hospitals, though it may be beneficial to centralize the rehabilitation of hip fracture patients to specialized units.

Changing structure and resources in a rheumatology combined unit during 1977–1999

OBJECTIVE

The aim was to study the changing structure and resources in a rheumatism hospital during the period 1977-1999 when rheumatology care was decentralized and new treatment strategies were introduced.

METHODS

Data on hospital management and production were retrieved retrospectively.

RESULTS

The number of beds was stepwise reduced from 133 to 44 and the average length of stay declined from 48 to 16 days. The combined unit and multidisciplinary team organization was kept, ensuring the combined effort of rheumatologists, rheumasurgeons, registered nurses, physiotherapists, occupational therapists, and social workers. One-third of the total staff was rheumateam members in 1977 compared to one-half in 1999. The proportions of physicians and registered nurses increased while the proportion of physiotherapists was stable. The number of discharges remained relatively unchanged and the number of outpatient consultations increased. Inflammatory rheumatic diseases remained the largest diagnostic group of in- and outpatients. Hospitalized care was received primarily by patients with arthritis and spondylitis. Patients with vasculitis and diffuse disorders of connective tissue accounted for an increasing proportion of the outpatient clinic production. Surgical procedures became more prevalent. Since 1995 approximately 50 large joint replacements have been performed annually.

CONCLUSION

The length of stay declined and patient care was shifted towards the outpatient clinic. The multidisciplinary team was strengthened. More resources were dedicated to physician-led and nurse-dependent procedures, but physiotherapy and rehabilitation remained part of inpatient care throughout the period. The expertise concentrated on inflammatory rheumatic disorders. The modesty of the large joint replacement caseload may challenge decentralized care.

Hospital ownership and quality of care: what explains the different results in the literature?

This systematic review examines what factors explain the diversity of findings regarding hospital ownership and quality. We identified 31 observational studies written in English since 1990 that used multivariate analysis to examine quality of care at nonfederal general acute, short-stay US hospitals. We find that pooled estimates of ownership effects are sensitive to the subset of studies included and the extent of overlap among hospitals analyzed in the underlying studies. Ownership does appear to be systematically related to differences in quality among hospitals in several contexts. Whether studies find for-profit and government-controlled hospitals to have higher mortality rates or rates of adverse events than their nonprofit counterparts depends on data sources, time period, and region covered. Policymakers should be aware of the underlying reasons for conflicting evidence in this literature, and the strengths and weaknesses of meta-analytic synthesis. The 'true' effect of ownership appears to depend on institutional context, including differences across regions, markets, and over time.

Characteristics of neonatal units that care for very preterm infants in Europe: results from the MOSAIC study

OBJECTIVES

We sought to compare guidelines for level III units in 10 European regions and analyze the characteristics of neonatal units that care for very preterm infants.

METHODS

The MOSAIC (Models of Organising Access to Intensive Care for Very Preterm Births) project combined a prospective cohort study on all births between 22 and 31 completed weeks of gestation in 10 European regions and a survey of neonatal unit characteristics. Units that admitted > or = 5 infants at < 32 weeks of gestation were included in the analysis (N = 111). Place of hospitalization of infants who were admitted to neonatal care was analyzed by using the cohort data (N = 4947). National or regional guidelines for level III units were reviewed.

RESULTS

Six of 9 guidelines for level III units included minimum size criteria, based on number of intensive care beds (6 guidelines), neonatal admissions (2), ventilated patients (1), obstetric intensive care beds (1), and deliveries (2). The characteristics of level III units varied, and many were small or unspecialized by recommended criteria: 36% had fewer than 50 very preterm annual admissions, 22% ventilated fewer than 50 infants annually, and 28% had fewer than 6 intensive care beds. Level II units were less specialized, but some provided mechanical ventilation (57%) or high-frequency ventilation (20%) or had neonatal surgery facilities (17%). Sixty-nine percent of level III and 36% of level I or II units had continuous medical coverage by a qualified pediatrician. Twenty-two percent of infants who were < 28 weeks of gestation were treated in units that admitted fewer than 50 very preterm infants annually (range: 2%-54% across the study regions).

CONCLUSIONS

No consensus exists in Europe about size or other criteria for NICUs. A better understanding of the characteristics associated with high-quality neonatal care is needed, given the high proportion of very preterm infants who are cared for in units that are considered small or less specialized by many recommendations.

Effect of hospital ownership status and payment structure on the adoption and use of drug-eluting stents for percutaneous coronary interventions

BACKGROUND

The impact of the use of drug-eluting stents in percutaneous coronary intervention (PCI) on cardiac care is still uncertain. We examined the influence of systemic factors, such as hospital ownership status, organizational characteristics and payment structure, on the use of drug-eluting stents in PCI and the effect on cardiac surgery volume.

METHODS

We conducted a cross-sectional analysis of drug-eluting stent use in 12 993 patients undergoing PCI with stenting (drug-eluting or bare-metal) and time-series regression analyses of the monthly number of cardiac surgery and PCI procedures performed using data collected from 1998 to 2004 at 13 public and private hospitals in the Emilia-Romagna region of Italy.

RESULTS

Public hospitals used drug-eluting stents more selectively than private hospitals, targeting the new device to patients at high risk of adverse events. The time-series regression analyses showed that the number of PCI procedures performed per year increased during this period, both in public (slope coefficient 36.4, 95% confidence interval [CI] 30.2 to 43.1) and private centres (slope coefficient 6.4, 95% CI 3.1 to 9.2 ). Concurrently, there was a reduction in the number of isolated coronary artery bypass graft (CABG) surgeries, although the degree of change was higher in public than in private hospitals (coefficient -16.1 v. -6.2 respectively ). The number of CABG procedures associated with valve surgery decreased in public hospitals (coefficient -5.0, 95% CI -6.1 to -3.8) but increased in private hospitals (coefficient 4.1, 95% CI 2.0 to 6.1).

INTERPRETATION

Public and private hospitals behaved differently in adopting drug-eluting stents and in using PCI with drug-eluting stents as a substitute for surgical revascularization.

Impact of regionalisation of cardiac surgery in Emilia-Romagna, Italy

STUDY OBJECTIVE

Assessment of the impact of the regionalisation of cardiac surgery through the organisational form of a hub&spoke model introduced in the year 2000.

DESIGN

Case mix adjusted before (1998-1999)-after (2000-2002) comparison of: (a) in-hospital and 30 days mortality rates; (b) proportion of patients timely (within one day) referred for surgery from spoke to hub centres; (c) patients' waiting times to surgery.

SETTING

Emilia-Romagna, an Italian region with four million residents.

PATIENTS

16,512 patients aged > or =18 years and referred to cardiac surgery over the period 1998-2002.

MAIN RESULTS

Overall, taking into account differences in case mix across the whole study period, the implementation of the regionalisation policy was associated with a 22% reduction (OR: 0.79, 95%CI: 0.66 to 0.93) in in-hospital mortality rate. The corresponding figure for 30 day mortality was 18% (OR: 0.82: 95%CI: 0.69 to 0.98). The individual centres' volume of cases changed over the study period for all hospitals but two, and the biggest reduction in mortality was seen at the centre with the largest increase in caseload.

CONCLUSIONS

This study provides additional evidence on the benefit of regionalisation of cardiac surgery interventions. The system allowed each centre to reach the minimum caseload required to assure good quality of care. These findings suggest that policies aimed at increasing cooperation rather than competition among health service providers have a positive impact on quality of care. Timely referrals for surgery increased by 21% (95%CI: 1.12 to 1.31), and mean waiting times were reduced by 7.5 average days (95%CI: -10.33 to -4.71).

Rival research programmes and their influence on nursing practice

In most forms of industry, there is an explicit link between research and development and subsequent technological processes. New discoveries can alter the direction or trajectory of technological progress. In this respect, health care is no different to any other form of industry. There are several theories of science which attempt to explain this link and predict its behaviour. According to Lakatos (1978), rival research programmes may co-exist, whilst Brouwer (1990) suggests they may vie with each other to alter the direction of technological progress. Presently, there are at least two research programmes which are competing to capture the activities of nurses. These are: the Health Care as Industrial Process programme, generating guideline driven nursing, and use of care pathways to maximize throughput plus labour substitution to minimize costs; and the Health Care as Therapeutic Interaction programme, focused on the management and delivery of the fundamental aspects of nursing care, and the use of emotional labour and psychological care to enable patients to cope and make sense of their situation. Ideally, the direction of practice should reflect both of these valid research programmes, with nurses as the staff best placed to integrate medical technology with humanity. Arguably, it is the Industrial Process programme which is currently dominant, at the price of decreased quality of care, and loss of the health benefits of therapeutic interaction. Greater effort is needed, in terms of research to reduce the apparent 'invisibility' of emotional labour, and education of nurses to boost therapeutic interaction skills. In order to re-direct the trajectory, managers should acknowledge and accommodate aspects of therapeutic interaction in service re-engineering, and use quality assurance tools which may accurately detect and monitor therapeutic interaction by nurses.

Volume of activity and occupancy rate in intensive care units. Association with mortality

OBJECTIVE

Mortality after many procedures is lower in centers where more procedures are done. It is controversial whether this is true for intensive care units, too. We examined the relationship between the volume of activity of intensive care units (ICUs) and mortality by a measure of risk-adjusted volume of activity specific for ICUs.

DESIGN

Prospective, multicenter, observational study.

SETTING

Eighty-nine ICUs in 12 European countries.

PATIENTS

During a 4-month study period, 12,615 patients were enrolled.

INTERVENTIONS

Demographic and clinical statistics, severity at admission and a score of nursing complexity and workload were collected.

RESULTS

Total volume of activity was defined as the number of patients admitted per bed per year, high-risk volume as the number of high-risk patients admitted per bed per year (selected combining of length of stay and severity of illness). A multi-step risk-adjustment process was planned. ICU volume corresponding both to overall [odds ratio (OR) 0.966] and 3,838 high-risk (OR 0.830) patients was negatively correlated with mortality. Relative mortality decreased by 3.4 and 17.0% for every five extra patients treated per bed per year in overall volume and high-risk volume, respectively. A direct relationship was found between mortality and the ICU occupancy rate (OR 1.324 and 1.351, respectively).

CONCLUSIONS

Intensive care patients, whatever their level of risk, are best treated where more high-risk patients are treated. Moreover, the higher the ICU occupancy rate, the higher is the mortality.

The practice-makes-perfect hypothesis in the context of other production concepts in health care

Many studies have found a significant relationship between the volume of specific diagnoses and procedures and patient outcomes. Often, these studies have cited the "practice-makes-perfect" hypothesis as a potential explanation. However, the expression "practice-makes-perfect" hypothesis is inappropriate in most circumstances. This article suggests using the expression "routine" hypothesis instead. In addition, this article compares the routine hypothesis with other familiar concepts from industrial production, which also aim at explaining the relationship between factor input and output in health care: economies of scale, economies of scope, the learning curve, and the focused factory. To point out subtle differences among the concepts, this article suggests a taxonomy organized by type of output and outcome. This taxonomy may help ensure the appropriate use of terminology when applying these concepts.

Is there a positive volume-outcome relationship in peripheral vascular surgery? Results of a systematic review

OBJECTIVES

to examine the evidence for the existence, or otherwise, of a positive volume-outcome relationship in the area of peripheral vascular surgery.

DESIGN

systematic overview of prospective or retrospective volume-outcome studies.

DATA SOURCES

seven bibliographic databases were searched for English-language articles published between 1986 and 1998.

STUDY SELECTION

thirty-six articles published in peer-reviewed journals; excluding editorials, letters or abstracts; and addressing volume and outcome in peripheral vascular surgery. Criteria were applied and agreed by consensus between two of the authors.

DATA EXTRACTION

the articles identified were independently assessed by two of the authors. Studies were categorised into three distinct areas - carotid endarterectomy- (17 studies), abdominal aortic aneurysm repair (16 studies) and other vascular interventions (four studies). Within each category studies were further classified according to full adjustment, partial adjustment or no adjustment for case mix. Where discrepancies arose, decisions were referred to a third author for arbitration.

DATA SYNTHESIS

findings for carotid endarterectomy identified a positive volume-outcome relationship for both mortality and stroke at the physician level. There was less support for a positive relationship for mortality at the hospital level, and no evidence of benefits for stroke in higher volume hospitals. If only studies making a full adjustment for case mix are included, there is no clear support from statistically significant evidence for or against a positive volume-outcome relationship. For repair of unruptured abdominal aortic aneurysms there is evidence of a positive volume-outcome relationship at both the physician and hospital level, with evidence being particularly strong at the level of the hospital. For ruptured aneurysms the evidence is suggestive of there not being a positive volume-outcome relationship at the hospital level, while for physicians the evidence is more balanced with no clear support either way. For other vascular interventions there were insufficient studies (n=4) from which to draw meaningful conclusions.

CONCLUSIONS

our results show that evidence of a relationship between volume and outcome in peripheral vascular surgery may be attributable to factors such as lack of adjustment for case-mix, different definitions of volume and poor quality of studies, especially those of retrospective design. Future studies should address these deficiencies by making full adjustment for case mix and by being prospective in design.

A comparison of hospital scale effects in short-run and long-run cost functions

Numerous estimates of economies of scale in the hospital setting have been obtained since the early 1980s from both flexible long-run and short-run cost functions. Although the theoretical superiority of the latter approach is widely recognized, it has been previously suggested that the two cost specifications yield quite similar econometric findings regarding scale effects. This paper utilizes a new data set consisting of 91 Greek NHS hospitals in order to empirically examine this proposition by comparing economies of scale estimates derived from both translog total and variable cost functions. The results indicate that the use of long-run equations might seriously mislead policy makers and that constant returns to scale prevail in Greek public hospitals.