As hospitals struggle to become profitable at Medicare reimbursement levels, they are looking at creating “economies of scale” to control costs and improve results. The question is, do these economies of scale actually result in decreased hospital costs? If so, how?
The attached infographic from Objective Health, a McKinsey Solution for Healthcare Providers, addresses these questions – the answers might surprise you. For instance, growing overall hospital facility volume does not actually result in economies of scale. However, driving higher volumes in certain medical procedures, does help.