The relationship between scale and performance in health care has been extensively debated by both academics and policymakers. Benchmarking tools have been developed in order to compare hospital performance and to understand its determinants. Many countries have recently engaged in significant consolidation efforts in an attempt to increase efficiency, achieve cost savings, and possibly improve quality of care. Consolidation policies include hospital mergers as well as a redesign of inter-organizational relationships (eg. centralized warehouses or jointly managed administrative services).
However, the question of “which hospital size is best” has not yet found a definitive answer (Giancotti et al., PLoS ON, 2017). Moreover, such question has generally been tackled in terms of “which hospital size is best for efficiency and financial performance” (e.g. Ferrier and Trivitt, J Prod Anal., 2013; Varabyova et al., Health Policy, 2013), whereas the implications for quality of care have been discussed only more recently and to a much lesser extent (e.g. Nayar et al., Health Care Management Review, 2013).
The purpose of this paper is to contribute to existing knowledge by looking at financial performance, but also and especially at the outcomes of care. To this end, it uses data from the Italian National Health Service and specifically from Italian Public Independent Hospitals. The Italian NHS is a promising research setting for three main reasons. First, Italian Public Independent Hospitals are numerous and heterogeneous in their characteristics, providing enough variation for testing different hypotheses. Second, a recent central-government initiative (“National Outcomes Programme”) has produced a large and robust data set of outcome indicators for each hospital. Third, another recent central-government initiative has produced guidelines both to better measure financial performance and to aggregate outcome measures into a small, meaningful set of overall outcome indicators.
Our research question can thus be formulated as follows: “What is the impact of hospital size on financial performance and outcomes of care?” To answer this question, we will perform regression analysis on financial performance data and quality of care indicators for 95 Italian Public Independent Hospitals over the period 2014-16. Size will be measured in terms of beds (structural size) and revenues (operative size). Control variables will include (e.g. Asmild et al., J Prod Anal., 2013) geographical area, teaching status, research status, general v. specialty, hospitals composed of one facility v. multiple facilities in different locations.
The analysis will provide new insightful evidence on the relationship between size and performance, thus contributing to both research and policymaking.
