ABSTRACT
This study examines the issue of economies of scale for home health agencies. A quadratic cost function is estimated utilizing a 1982 national data set based on Medicare Cost Reports for 2000 home health agencies. This paper concludes that neither economies of scale nor scope are substantial in the provision of home health services.
Subject(s)
Certificate of Need/legislation & jurisprudence , Home Care Services/economics , Regional Health Planning/legislation & jurisprudence , Cost-Benefit Analysis , Data Collection , Health Services Needs and Demand/economics , Medicare/economics , Models, Theoretical , Statistics as Topic , United StatesABSTRACT
Interest in the efficiency or inefficiency of non-profit firms has spawned research on the administrative costs of Blue Cross and Blue Shield plans. Relying on plausible implications of the property rights theory of the firm, both Blair, Ginsburg, and Vogel (1975) and Vogel (1977) noted some evidence of inefficiency in these firms. Our analysis, however, utilizing their models and more recent data, reveals little convincing evidence for the view that Blue Shield plans are inefficient.
