Enhancing hospital productivity

Abstract

Healthcare expenditure in Western countries is substantial and outpaces economic growth, therefore cost containment in healthcare is high on the political agenda. One option is to increase productivity in healthcare, do more with less. This thesis uses the Dutch hospitals as a case-study and examines the three cornerstones of productivity: scale, efficiency and technical change. Based on meta-analysis it is concluded that there are no economies of scale for hospitals beyond 320 beds. Furthermore there are indications that the optimum size is significant smaller. Analysis of the efficiency of Dutch hospitals shows that there are only marginal possibilities for improvement of the efficiency. Technical change is a collective noun for productivity changes resulting from the overall process of invention, innovation, diffusion of technology and institutional changes. Although productivity consistently increased with about 2% per year as a result of technical change, it is difficult to pinpoint the innovations that contributed most to this growth. In general innovations in the field of ICT and chain care have positively contributed to productivity; productivity loss is associated with innovations aimed at improving quality. Furthermore, the thesis shows that innovations have an initial phase in which they hamper productivity; it takes time before hospitals can fully benefit from innovations.