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Healthcare managers’ perception of economies of scale

Anna Svarts (Department of Industrial Economics and Management, KTH Royal Institute of Technology, Stockholm, Sweden)

Journal of Health Organization and Management

ISSN: 1477-7266

Article publication date: 15 May 2017

Abstract

Purpose

The purpose of this paper is to explore how healthcare managers perceive economies of scale and the underlying mechanisms for how scale/size affects performance.

Design/methodology/approach

Data were collected in 20 in-depth interviews with healthcare professionals from 13 healthcare delivery organizations and from a public authority that finances and contracts healthcare services. Data were coded and analysed using content analysis.

Findings

The study concludes that the impact of scale on performance is perceived by healthcare professionals to be different for different types of healthcare services: For surgery, significant scale effects related to spreading of fixed cost, the experience curve, and potential for process improvement. For inpatient care, moderate scale effects related to spreading of fixed costs and costs of doctors on on-call duty. For outpatient care, small or no scale effects.

Research limitations/implications

The small sample of interviewees from a single geographical region and healthcare system limits the applicability of the findings.

Originality/value

The paper provides insights into how healthcare managers experience scale effects and how they consider economies of scale when planning hospital configuration. Also, past studies of economies of scale in hospitals proffer mixed results and the findings in this paper indicate a possible explanation for this inconclusiveness, i.e. differences in service mix between different hospitals.

Keywords

Citation

Svarts, A. (2017), "Healthcare managers’ perception of economies of scale", Journal of Health Organization and Management, Vol. 31 No. 3, pp. 317-330. https://doi.org/10.1108/JHOM-01-2017-0006

Publisher

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Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited