Specialization and production cost efficiency: evidence from ambulatory surgery centers

Specialization and production cost efficiency: evidence from ambulatory surgery centers In the U.S. health care sector, the economic logic of specialization as an organizing principle has come under active debate in recent years. An understudied case is that of ambulatory surgery centers (ASCs), which recently have become the dominant provider of specific surgical procedures. While the majority of ASCs focus on a single specialty, a growing number are diversifying to offer a wide range of surgical services. We take a multiple output cost function approach to an empirical investigation that compares production economies in single specialty ASCs with those in multispecialty ASCs. We applied generalized estimating equation techniques to a sample of Pennsylvania ASCs for the period 2004–2014, including 73 ASCs that specialized in gastrointestinal procedures and 60 ASCs that performed gastrointestinal as well as other specialty procedures. Results indicated that both types of ASC had small room for expansion. In simulation analysis, production of GI services in specialized ASCs had a cost advantage over joint production of GI with other specialty procedures. Our results provide support for the focused factory model of production in the ASC sector. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Health Care Finance and Economics Springer Journals

Specialization and production cost efficiency: evidence from ambulatory surgery centers

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Publisher
Springer US
Copyright
Copyright © 2017 by Springer Science+Business Media, LLC
Subject
Medicine & Public Health; Public Health; Health Economics; Health Care Management; Health Administration; Public Finance; Political Economy/Economic Policy
ISSN
1389-6563
eISSN
2199-9031
D.O.I.
10.1007/s10754-017-9225-9
Publisher site
See Article on Publisher Site

Abstract

In the U.S. health care sector, the economic logic of specialization as an organizing principle has come under active debate in recent years. An understudied case is that of ambulatory surgery centers (ASCs), which recently have become the dominant provider of specific surgical procedures. While the majority of ASCs focus on a single specialty, a growing number are diversifying to offer a wide range of surgical services. We take a multiple output cost function approach to an empirical investigation that compares production economies in single specialty ASCs with those in multispecialty ASCs. We applied generalized estimating equation techniques to a sample of Pennsylvania ASCs for the period 2004–2014, including 73 ASCs that specialized in gastrointestinal procedures and 60 ASCs that performed gastrointestinal as well as other specialty procedures. Results indicated that both types of ASC had small room for expansion. In simulation analysis, production of GI services in specialized ASCs had a cost advantage over joint production of GI with other specialty procedures. Our results provide support for the focused factory model of production in the ASC sector.

Journal

International Journal of Health Care Finance and EconomicsSpringer Journals

Published: Sep 12, 2017

References

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