Economies of Scale in Physician Practice
A potentially important source of productivity gains in physician practices is larger practice size. We investigate economies of scale in physician practices using a large nationwide survey of self-employed physicians. When output is measured by practice revenues, we estimate significantly increasin...
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Veröffentlicht in: | Medical care research and review 1996-12, Vol.53 (4), p.417-440 |
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Sprache: | eng |
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Zusammenfassung: | A potentially important source of productivity gains in physician practices is larger practice size. We investigate economies of scale in physician practices using a large nationwide survey of self-employed physicians. When output is measured by practice revenues, we estimate significantly increasing returns to scale for single-specialty practices, implying that forming larger practices lowers costs. The lowest-cost practice size is estimated to be 5.2 physicians compared to a sample average size of 2.4 physicians. On average, scale inefficiency is estimated at 9%. Measuring output by physician office visits, we find that group physicians provide 17% more office visits than solo practitioners, controlling for practice inputs, and physician and practice characteristics. Physicians practicing in mid-sized groups of three to four are the most productive, providing 21% more visits than solo, Physicians. If all physicians practiced in the most productive group size, average office visit productivity would rise by 13%. |
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ISSN: | 1077-5587 1552-6801 |
DOI: | 10.1177/107755879605300403 |