Economies of scope in the Norwegian public hospital sector

Nils Arne Lindaas (), Kjartan Sarheim Anthun (), Sverre Kittelsen and Jon Magnussen ()
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Nils Arne Lindaas: Norwegian University of Science and Technology
Kjartan Sarheim Anthun: Norwegian University of Science and Technology
Jon Magnussen: Norwegian University of Science and Technology

The European Journal of Health Economics, 2025, vol. 26, issue 2, No 12, 325-335

Abstract: Abstract This study investigates the potential economies of scope in the Norwegian public hospital sector after a major structural and organizational reform. Economies of scope refers to potential cost savings occurring from the scope of production rather than the scale. We use a data driven approach to distinguish between relatively specialized and differentiated hospitals. Using registry data spanning the period 2013–2019, we use non-parametric data envelopment analysis with bootstrapping procedures to investigate the potential presence of economies of scope. This is done separately for three different dimensions of which hospital production can be either specialized or differentiated. The findings suggest that economies of scope are present in the Norwegian hospital sector, meaning that there are cost savings related to the optimal differentiation of the activity. It is difficult to conclude on how these findings relate to the reform.

Keywords: Economies of scope; Hospital; Reform; New public management; Data envelopment analysis; C14; D24; I18 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10198-024-01704-z

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