Efficiency and optimal size of hospitals: Results of a systematic search

BACKGROUND: National Health Systems managers have been subject in recent years to considerable pressure to increase concentration and allow mergers. This pressure has been justified by a belief that larger hospitals lead to lower average costs and better clinical outcomes through the exploitation of economies of scale. In this context, the opportunity to measure scale efficiency is crucial to address the question of optimal productive size and to manage a fair allocation of resources. METHODS AND FINDINGS: This paper analyses the stance of existing research on scale efficiency and optimal size of the hospital sector. We performed a systematic search of 45 past years (1969–2014) of research published in peer-reviewed scientific journals recorded by the Social Sciences Citation Index concerning this topic. We classified articles by the journal’s category, research topic, hospital setting, method and primary data analysis technique. Results showed that most of the studies were focussed on the analysis of technical and scale efficiency or on input / output ratio using Data Envelopment Analysis. We also find increasing interest concerning the effect of possible changes in hospital size on quality of care. CONCLUSIONS: Studies analysed in this review showed that economies of scale are present for merging hospitals. Results supported the current policy of expanding larger hospitals and restructuring/closing smaller hospitals. In terms of beds, studies reported consistent evidence of economies of scale for hospitals with 200–300 beds. Diseconomies of scale can be expected to occur below 200 beds and above 600 beds.