Production Factors, Productivity Dynamics and Quality Gains as Determinants of Healthcare Spending Growth in U.S. Hospitals

Juan Contreras, Patel Elena and Tristao Ignez

No 2013-13, Working Papers from Banco de México

Abstract: We analyze the contribution of production factors to revenue growth in almost the complete universe of U.S. hospitals, accounting for quality and productivity. Production factors (capital, labor, energy, materials and drugs) contributed 70% (drugs alone contributed 52 %), better health outcomes (higher quality) contributed 5 %, and better use of resources (productivity) contributed 25 %. We find increasing returns to scale, a markup of between 15% and 36% and a much larger productivity dispersion in the hospital sector than the one found in manufacturing, with gains coming mainly from within-hospital productivity growth and almost zero coming from net entry.

JEL-codes: D24 E22 I12 (search for similar items in EconPapers)
Date: 2013-09
New Economics Papers: this item is included in nep-eff and nep-mac
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