Economies of Scale and Scope in Hospitals: An Empirical Study of Volume Spillovers

References

• Agency for Healthcare Research and Quality (2014) National healthcare disparities report. Technical report, AHRQ Publication No. 14-0006, U.S. Department of Health and Human Services, Agency for Healthcare Research and Quality, Rockville, MD.Google Scholar
• Aletras V (1997) Part II: The relationship between volume and the scope of activity and hospital costs. NHS Centre for Reviews and Dissemination, ed. Concentration and Choice in the Provision of Hospital Services, vol. 8(2) (University of York, York, UK).Google Scholar
• Argote L (1982) Input uncertainty and organizational coordination in hospital emergency units. Admin. Sci. Quart. 27(3):420–434.Crossref, Google Scholar
• Argote L (2013) Organizational Learning: Creating, Retaining and Transferring Knowledge, 2nd ed. (Springer Science & Business Media, New York).Crossref, Google Scholar
• Association of Surgeons of Great Britain and Ireland (2007) Emergency general surgery: The future. Technical report, Association of Surgeons of Great Britain and Ireland, London.Google Scholar
• Bates D, Mächler M, Bolker B, Walker S (2015) Fitting linear mixed-effects models using lme4. J. Statistical Software 67(1):1–48.Crossref, Google Scholar
• Becker GS, Murphy KM (1992) The division of labor, coordination costs, and knowledge. Quart. J. Econom. 107(4):1137–1160.Crossref, Google Scholar
• Begg C, Cramer L, Hoskins W, Brennan M (1998) Impact of hospital volume on operative mortality for major cancer surgery. JAMA 280(20):1747–1751.Crossref, Google Scholar
• Bell A, Jones K (2015) Explaining fixed effects: Random effects modeling of time-series cross- sectional and panel data. Political Sci. Res. Methods 3(1):133–153.Crossref, Google Scholar
• Birkmeyer J, Siewers A, Finlayson E, Stukel T, Lucas F, Batista I, Welch H, Wennberg D (2002) Hospital volume and surgical mortality in the United States. New England J. Medicine 346(15):1128–1137.Crossref, Google Scholar
• Bohmer R (2009) Designing Care: Aligning the Nature and Management of Healthcare (Harvard Business School Press, Boston).Google Scholar
• Carey K, Burgess JF, Young GJ (2015) Economies of scale and scope: The case of specialty hospitals. Contemporary Econom. Policy 33(1):104–117.Crossref, Google Scholar
• Certo ST, Withers M, Semadeni M (2017) A tale of two effects: Using longitudinal data to compare within- and between-firm effects. Strategic Management J. 38(7):1536–1556.Crossref, Google Scholar
• Chan C, Farias V, Escobar G (2017) The impact of delays on service times in the intensive care unit. Management Sci. 63(7):2049–2072.Link, Google Scholar
• Christensen C, Grossman J, Hwang J (2009) The Innovator’s Prescription: A Disruptive Solution for Healthcare (McGraw-Hill, New York).Google Scholar
• Clark J (2012) Comorbidity and the limitations of volume and focus as organizing principles. Medical Care Res. Rev. 69(1):83–102.Crossref, Google Scholar
• Clark J, Huckman R (2012) Broadening focus: Spillovers, complementarities, and specialization in the hospital industry. Management Sci. 58(4):708–722.Link, Google Scholar
• Dabhilkar M, Svarts A (2019) From general to specialty hospitals: operationalising focus in healthcare operations. Oper. Management Res. 12(1-2):94–111.Crossref, Google Scholar
• Dawson H, Weerasooriya J, Webster G (2008) Hospital admissions via the emergency department: implications for planning and patient flow. Healthcare Quart. 11(1):20–22.Crossref, Google Scholar
• Department of Health (2013) A simple guide to payment by resultsAccessed March 9, 2016, https://www.gov.uk/government/publications/simple-guide-to-payment-by-results.Google Scholar
• Department of Health(2015) NHS reference costs 2013 to 2014. Accessed January 21, 2019, https://www.gov.uk/government/publications/nhs-reference-costs-2013-to-2014.Google Scholar
• Department of Health (2016) Reference costs 2015-16. Accessed May 15, 2017, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/577083/Reference_Costs_2015-16.pdf.Google Scholar
• Dijk N, Sluis E (2004) To pool or not to pool in call centers. Production Oper. Management 17(3):296–305.Crossref, Google Scholar
• Dimitriadis P, Iyer S, Evgeniou E (2013) The challenge of cancellations on the day of surgery. Internat. J. Surgery 11(10):1126–1130.Crossref, Google Scholar
• Dixon A, Appleby J, Robertson R, Burge P, Devlin N, Magee N (2010) Patient Choice: How Patients Choose and How Providers Respond (The King’s Fund, London).Google Scholar
• Dranove D (1998) Economies of scale in non-revenue producing cost centers: Implications for hospital mergers. J. Health Econom. 17(1):69–83.Crossref, Google Scholar
• Enthoven AC, Tollen LA (2005) Competition in healthcare: It takes systems to pursue quality and efficiency. Health Affairs 24(Suppl 1):W5–420–433.Crossref, Google Scholar
• Ferrand Y, Magazine M, Rao U (2014) Managing operating room efficiency and responsiveness for emergency and elective surgeries–A literature survey. IIE Trans. Healthcare Systems Engrg. 4(1):49–64.Google Scholar
• Fetter R (1991) Diagnosis related groups: Understanding hospital performance. Interfaces 21(1):6–26.Link, Google Scholar
• Fisher M, Ittner C (1999) The impact of product variety on automobile assembly operations: Empirical evidence and simulation analysis. Management Sci. 45(6):771–786.Link, Google Scholar
• Gaughan J, Mason A, Street A, Ward P (2012) English hospitals can improve their use of resources: An analysis of costs and length of stay for ten treatments. Research Paper 78, Centre for Health Economics, University of York, London.Google Scholar
• Gaynor M, Seider H, Vogt W (2004) Volume-outcome and antitrust in U.S. healthcare markets. Working paper, Carnegie Mellon University, Pittsburgh.Google Scholar
• Gaynor MS, Kleiner SA, Vogt WB (2015) Analysis of hospital production: An output index approach. J. Appl. Econometrics 30(3):398–421.Crossref, Google Scholar
• Gelman A, Hill J (2007) Data Analysis Using Regression and Multilevel/Hierarchical Models (Cambridge University Press, New York).Crossref, Google Scholar
• Giancotti M, Guglielmo A, Mauro M (2017) Efficiency and optimal size of hospitals: Results of a systematic search. PLoS One 12(3). e0174533Crossref, Google Scholar
• Gimeno J, Woo C (1999) Multimarket contact, economies of scope, and firm performance. Acad. Management J. 42(3):239–259.Crossref, Google Scholar
• Gowrisankaran G, Ho V, Town R (2006) Causality, learning and forgetting in surgery. Working paper, Washington University in St. Louis, St. Louis.Google Scholar
• Greenwald L, Cromwell J, Adamache W, Bernard S, Drozd E, Root E, Devers K (2006) Specialty vs. community hospitals: Referrals, quality, and community benefits. Health Affairs 25(1):106–118.Crossref, Google Scholar
• Guerin-Calvert M (2011) Assessment of cost trends and price differences for U.S. hospitals. Working Paper No. 294, Federal Trade Commission, Washington, DC.Google Scholar
• Henderson R, Cockburn I (1996) Scale, scope, and spillovers: The determinants of research productivity in drug discovery. RAND J. Econom. 27(1):32–59.Crossref, Google Scholar
• Healthcare Financial Management Association (2016) Acute health clinical costing standards. Accessed March 9, 2016, https://webarchive.nationalarchives.gov.uk/20171012004847/https://content.digital.nhs.uk/media/18044/HRG4-201415-Reference-Costs-Roots/xls/HRG4__201415_Reference_Costs_Roots_v1.0.xls.Google Scholar
• Hill CW, Hoskisson RE (1987) Strategy and structure in the multiproduct firm. Acad. Management Rev. 12(2):331–341.Crossref, Google Scholar
• Her Majesty’s Treasury (2015) HMT public expenditure statistical analyses (PESA). Accessed March 12, 2016, https://www.gov.uk/government/collections/public-expenditure-statistical-analyses-pesa.Google Scholar
• Hopp W, Lovejoy W (2012) Hospital Operations: Principles of High Efficiency Healthcare (FT Press, Upper Saddle River, NJ).Google Scholar
• Hopp W, Spearman M (2004) To pull or not to pull: What is the question? Manufacturing Service Oper. Management 6(2):133–148.Link, Google Scholar
• Health and Social Care Information Centre (2015) HRG4 2014/15 consultation grouper roots. Accessed March 9, 2016, https://webarchive.nationalarchives.gov.uk/20171012004847/http://content.digital.nhs.uk/media/18044/HRG4-201415-Reference-Costs-Roots/xls/HRG4__201415_Reference_Costs_Roots_v1.0.xls.Google Scholar
• Hsiao C (2015) Analysis of Panel Data, 3rd ed. (Cambridge University Press, Cambridge, UK).Google Scholar
• Huckman RS, Zinner DE (2008) Does focus improve operational performance? lessons from the management of clinical trials. Strategic Management J. 29(2):173–193.Crossref, Google Scholar
• Hurst J, Williams S (2012) Can NHS hospitals do more with less? Technical report, Nuffield Trust, London.Google Scholar
• Hyer NL, Wemmerlöv U, Morris JA Jr (2009) Performance analysis of a focused hospital unit: The case of an integrated trauma center. J. Oper. Management 27(3):203–219.Crossref, Google Scholar
• Johnson P (2014) Extension of Nakagawa & Schielzeth’s R2GLMM to random slopes models. Methods Ecology Evolution 5(9):944–946.Crossref, Google Scholar
• Joustra P, Van der Sluis E, Van Dijk N (2010) To pool or not to pool in hospitals: A theoretical and practical comparison for a radiotherapy outpatient department. Ann. Oper. Res. 178(1):77–89.Crossref, Google Scholar
• Junius K (1997) Economies of scale: A survey of the empirical literature. Working Paper No. 813, Kiel Institute for the World Economy, Kiel, Germany.Google Scholar
• Kc D, Staats BR (2012) Accumulating a portfolio of experience: The effect of focal and related experience on surgeon performance. Manufacturing Service Oper. Management 14(4):618–633.Link, Google Scholar
• Kekre S, Srinivasan K (1990) Broader product line: a necessity to achieve success? Management Sci. 36(10):1216–1232.Link, Google Scholar
• Kim H (1987) Economies of scale in multi-product firms: an empirical analysis. Economica 54(214):185–206.Crossref, Google Scholar
• Kjekshus L, Hagen T (2005) Ring fencing of elective surgery: Does it affect hospital efficiency? Health Service Management Res. 18(3):186–197.Crossref, Google Scholar
• Kristensen T, Olsen K, Kilsmark J, Pedersen K (2008) Economies of scale and optimal size of hospitals: Empirical results for Danish public hospitals. Working paper, University of Southern Denmark, Odense, Denmark.Google Scholar
• Kuntz L, Scholtes S, Sülz S (2019) Separate and concentrate: Accounting for patient complexity in general hospitals. Management Sci. 65(6):2482–2501.Link, Google Scholar
• Li G, Rajagopalan S (1998) Process improvement, quality, and learning effects. Management Sci. 44(11-part-1):1517–1532.Link, Google Scholar
• Marini G, Miraldo M (2009) Economies of scale and scope in the English hospital sector, Working paper, University of York, York, UK.Google Scholar
• Mayer E, Faiz O, Athanasiou T, Vincent C (2008) Measuring and enhancing elective service performance in NHS operating theatres: An overview. J. Royal Soc. Medicine 101(6):273–277.Crossref, Google Scholar
• McDermott CM, Stock GN, Shah R (2011) Relating focus to quality and cost in a healthcare setting. Oper. Manag. Res. 4(3–4):127–137.Crossref, Google Scholar
• Monitor (2012) Economies of scale and scope in healthcare markets. Accessed July 14, 2017, https://www.gov.uk/government/consultations/healthcare-markets-economies-of-scale-and-scope.Google Scholar
• Monitor (2013) A guide to the market forces factor. Technical report, Publication Code IRG 31/13, Monitor, National Health Services, London.Google Scholar
• Monitor (2015) Improving productivity in elective care. Accessed March 9, 2016, https://www.gov.uk/guidance/improving-productivity-in-elective-care.Google Scholar
• Moore F (1959) Economies of scale: Some statistical evidence. Quart. J. Econom. 73(2):232–245.Crossref, Google Scholar
• Mundlak Y (1978) On the pooling of time series and cross section data. Econometrica 46(1):69–85.Crossref, Google Scholar
• National Audit Office (2011) Delivering efficiency savings in the NHS. Technical report, National Audit Office, London.Google Scholar
• Nembhard I, Tucker A (2011) Deliberate learning to improve performance in dynamic service settings: Evidence from hospital intensive care units. Organ. Sci. 22(4):907–922.Link, Google Scholar
• National Health Service (2017) Overall patient experience scores. Accessed July 17, 2017, https://www.england.nhs.uk/statistics/statistical-work-areas/pat-exp/.Google Scholar
• Nuffield Trust (2016) NHS in numbers. Accessed March 12, 2016, http://www.nuffieldtrust.org.uk/nhs-numbers-0.Google Scholar
• Panzar J, Willig R (1977) Economies of scale in multi-output production. Quart. J. Econom. 91(3):481–493.Crossref, Google Scholar
• Panzar J, Willig R (1981) Economies of scope. Amer. Econom. Rev. 71(2):268–272.Google Scholar
• Penrose E (1959) The Theory of the Growth of the Firm (John Wiley & Sons, New York).Google Scholar
• Pisano G, Bohmer R, Edmondson A (2001) Organizational differences in rates of learning: Evidence from the adoption of minimally invasive cardiac surgery. Management Sci. 47(6):752–768.Link, Google Scholar
• Porter M (1979) How competitive forces shape strategy. Harvard Bus. Rev. 75(2):137–145.Google Scholar
• Porter M (1985) The Competitive Advantage: Creating and Sustaining Superior Performance (Free Press, New York).Google Scholar
• Porter M, Teisberg E (2006) Redefining Healthcare: Creating Value-Based Competition on Results (Harvard Business Press, Boston).Google Scholar
• Posnett J (2002) Are bigger hospitals better? McKee M, Healy J, eds. Hospitals in a Changing Europe (Open University Press, Buckingham, UK), 100–118.Google Scholar
• Prahalad CK, Bettis RA (1986) The dominant logic: A new linkage between diversity and performance. Strategic Management J. 7(6):485–501.Crossref, Google Scholar
• Preyra C, Pink G (2006) Scale and scope efficiencies through hospital consolidations. J. Health Econom. 25(6):1049–1068.Crossref, Google Scholar
• Ramdas K, Saleh K, Stern S, Liu H (2017) Variety and experience: Learning and forgetting in the use of surgical devices. Management Sci. 64(6):2590–2608.Link, Google Scholar
• Rawley E, Simcoe T (2010) Diversification, diseconomies of scope, and vertical contracting: Evidence from the taxicab industry. Management Sci. 56(9):1534–1550.Link, Google Scholar
• Royal College of Surgeons of England/Department of Health (2007) Separating emergency and elective surgical care: Recommendations for practice. Technical report, Royal College of Surgeons of England, Department of Health, London.Google Scholar
• Royal College of Surgeons of England/Department of Health (2010) The higher risk surgical patient: Toward improved care for a forgotten group. Technical report, Royal College of Surgeons of England, Department of Health, London.Google Scholar
• Robb W, Osullivan M, Brannigan A, Bouchier-Hayes D (2004) Are elective surgical operations cancelled due to increasing medical admissions? Irish J. Medical Sci. 173(3):129–132.Crossref, Google Scholar
• Sav G (2004) Higher education costs and scale and scope economies. Appl. Econom. 36(6):607–614.Crossref, Google Scholar
• Savva N, Tezcan T, Yildiz O (2019) Can yardstick competition reduce waiting times? Management Sci. 65(7):3196–3215.Link, Google Scholar
• Schilling M, Vidal P, Ployhart R, Marangoni A (2003) Learning by doing something else: Variation, relatedness, and the learning curve. Management. Sci. 49(1):39–56.Link, Google Scholar
• Schoar A (2002) Effects of corporate diversification on productivity. J. Finance 57(6):2379–2403.Crossref, Google Scholar
• Shleifer A (1985) A theory of yardstick competition. RAND J. Econom. 16(3):319–327.Crossref, Google Scholar
• Silk A, Berndt E (1993) Scale and scope effects on advertising agency costs. Marketing Sci. 12(1):53–72.Link, Google Scholar
• Skinner W (1974) The focused factory. Harvard Bus. Rev. 52(3):113–121.Google Scholar
• Staats B, Gino F (2012) Specialization and variety in repetitive tasks: Evidence from a Japanese bank. Management Sci. 58(6):1141–1159.Link, Google Scholar
• Tsikriktsis N (2007) The effect of operational performance and focus on profitability: A longitudinal study of the us airline industry. Manufacturing Service Oper. Management 9(4):506–517.Link, Google Scholar
• UK Audit Commission (2011) Improving coding, costing and commissioning: Annual report on the payment by results data assurance programme 2010-11. Accessed March 9, 2016, https://webarchive.nationalarchives.gov.uk/20171012004847/http://content.digital.nhs.uk/media/18044/HRG4-201415-Reference-Costs-Roots/xls/HRG4__201415_Reference_Costs_Roots_v1.0.xls.Google Scholar
• Vanberkel P, Boucherie R, Hans E, Hurink J, Litvak N (2012) Efficiency evaluation for pooling resources in healthcare. OR Spectrum 34(2):371–390.Crossref, Google Scholar
• West P (1998) Future hospital services in the NHS: One size fits all? Nuffield Occasional Paper No. 6, Health Economics Series, Nuffield Trust, London.Google Scholar
• Williamson O (1975) Markets and Hierarchies: Analysis and Antitrust Implications (Free Press, New York).Google Scholar
• Wong D, Harris S, Moonesinghe S, Moonesinghe SR, Wong DJ, Harris SK, Bedford J, et al.. (2018) Cancelled operations: A 7-day cohort study of planned adult inpatient surgery in 245 UK National Health Service hospitals. British J. Anaesthesia 121(4):730–738.Crossref, Google Scholar
• Zhou YM (2011) Synergy, coordination costs, and diversification choices. Strategic Management J. 32(6):624–639.Crossref, Google Scholar