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An empirical study on the economies of scale of hospital service in korea

Other Title
우리나라 병원의 규모의 경제에 관한 연구
전, 기홍; 조, 우현; 김, 양균
Korean Journal of Health Policy and Administration, 4(1):107-122, 1994
Journal Title
Korean Journal of Health Policy and Administration; 보건행정학회지
Many alternatives have been discussed to reduce the medical expenditure and to use the medical resources effectively. Many studies about the economies of scale have been done for the last several decades. This study has analyzed the relationship between the number of beds and the mean expense per hospitalization day in Korea. A Cost Function Model was identified and we wanted to see the minimum optimal size with the cheapest mean expense per hospitalization day. The result is as follows; 1. In the Cost Function Mode, (the number of beds)$^{2}$, the number of personnel, productivity and training institutions are the factors that statisticaly influence the mean expenses. 2. By the univariate analysis the mean expense proved to be the smallest as the level of 150-200bed, The breaked down of the components of expenses shows that the mean labor cost is much different from the mean value of material and administration costs, and that hospital with 150-200 beds also have the minimal expense. The mean expense goes up dramatically in hospitals of 450 beds or more. 3. When the other conditions are constant, according to the multiple regression analysis of the mean expense per adjusted hospitalization day the minimum optimal size with the cheapest expense is a hospital with 191 beds and the hospital with 230 beds takes the lowest mean labor cost. The material or administration costs are not influenced by hospital size. This research has limitation in measuring the variables that influence hospital xpenses, in estimating hospital output by the number of beds in considering outpatient cost and in securing representativeness of hospitals because many hospitals made no responses to the research questionnare. But it is valuable and helpful for development of health policy to figure out the number of beds with the cheapest expense per hospitalization day.
Economies of ScaleCost Function ModelMinimum Optimal size
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Journal Papers > School of Medicine / Graduate School of Medicine > Preventive Medicine & Public Health
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