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Scope and scale inefficiencies in physician practices
Author(s) -
Rosenman Robert,
Friesner Daniel
Publication year - 2004
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.882
Subject(s) - allocative efficiency , scope (computer science) , inefficiency , scale (ratio) , business , set (abstract data type) , economies of scope , specialty , economies of scale , service (business) , actuarial science , operations management , economics , marketing , computer science , microeconomics , medicine , family medicine , quantum mechanics , programming language , physics
Using a national data set, this paper looks at the efficiency of physician practices, focusing on scopes of service by comparing single specialty groups and multispecialty groups. An analysis of efficiency using DEA indicates that there are scope inefficiencies from combining different types of providers into a single practice. Most of the inefficiency is due to technical rather than allocative reasons. In addition, we find that larger practices are able to capture efficiencies of scope, but incur inefficiencies of scale. Copyright © 2004 John Wiley & Sons, Ltd.