Scales and size-quality outcomes in adult learning disability residential care: evidence from the UK

Chelsea Chunwen Xiao (), Nikita Makarchev () and Xin Tao ()
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Chelsea Chunwen Xiao: Chinese University of Hong Kong
Nikita Makarchev: University of Oxford
Xin Tao: Chinese University of Hong Kong

The European Journal of Health Economics, 2024, vol. 25, issue 4, No 8, 655-669

Abstract: Abstract Residential care services are under increasing pressure to lower service provision costs while maintaining quality of care. Using a translog cost function, this paper examines the relationship between cost, quality and output in England’s learning disability (LD) residential care sector. It finds genuine but diminishing economies of scale in LD residential care services vis-à-vis output (i.e., care weeks). However, some variation exists: higher-quality LD residential care homes appear to have larger economies of scale than lower-quality ones. Supplementary regression analysis, examining quality-size, further finds quality (a) is negatively associated with LD care homes of six or fewer beds; (b) shows no association with homes of more than six beds. These findings enhance residential care literature and raise the possibility that, by promoting the establishment of larger high-quality care homes, cost savings may be achieved without sacrificing quality.

Keywords: Learning disability residential care; Economies of scale; Size and quality; Policy reform; England (search for similar items in EconPapers)
JEL-codes: C01 D20 H00 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10198-023-01599-2

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