Public Hospital Costs in Two Australian States |
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Authors: | Jerome Fahrer,Justin G. Fung,& Ian R. Harper |
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Affiliation: | The Allen Consulting Group, Melbourne, Melbourne Business School, The University of Melbourne |
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Abstract: | This study examines the long-run and short-run behaviour of public hospital average costs in two Australian States: Victoria and Queensland. Using adjusted weighted inlier-equivalent separations as a measure of hospital output, and floor area as a measure of capacity, the study finds a hump- or '∩'-shaped long-run average cost curve at the 5 per cent significance level in both data sets. The study also finds a saucer- or '∪'-shaped relationship between capacity utilisation and short-run average cost at the 5 per cent level. |
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