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Revista Portuguesa de Saúde Pública

Print version ISSN 0870-9025

Abstract

AZEVEDO, Helda  and  MATEUS, Céu. Economies of scale and scope: A literature review in the context of hospital mergers. Rev. Port. Sau. Pub. [online]. 2014, vol.32, n.1, pp.106-117. ISSN 0870-9025.

Driven by the current pressure on resources induced by budgetary cuts, the Portuguese Ministry of Health is imposing changes in the management model and organization of NHS hospitals, including the creation of hospital centres as a result of administrative mergers of existing hospitals. According to the political discourse, one of the main goals expected from this measure is the creation of synergies and more efficiency in the use of available resources by adjusting their scale optimisation. Given this active policy of hospital merger, this study intends to describe the underlying reasons and the impact on efficiency gains, by looking at economies of scale namely through reductions in expenditures, based on the literature review. It was also sought to analyse the appropriate techniques to evaluate the hospitals' efficiency and the cost structure. The literature suggests that there are economies of scale and scope to explore, but only mergers of relatively small and similar hospitals were successful.

Keywords : Economies of scale; Economies of scope; Frontier analysis; Cost function model; Hospital mergers.

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