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On the efficient location of hospitals

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  • Donald F. Vitaliano

    (Rensselaer Polytechnic Institute)

Abstract

An efficient hospital location minimizes the sum of treatment costs and patient travel costs. This paper presents a model of a circular hospital market area and estimates the parameters of that model for 125 hospitals in New York State outside of New York City. On average, an efficient location involves a patient vehicle journey of 16 min, but the actual average is 42 min. Thus patients are required to travel too far, given the existing size and service mix of hospitals. Free entry is unlikely to remedy the situation since the number of hospitals has steadily declined due to continuing closures and mergers, and State policy essentially prohibits for-profit hospitals, which might otherwise seek to fill gaps in the market.

Suggested Citation

  • Donald F. Vitaliano, 2020. "On the efficient location of hospitals," Letters in Spatial and Resource Sciences, Springer, vol. 13(1), pages 1-10, April.
    • Handle: RePEc:spr:lsprsc:v:13:y:2020:i:1:d:10.1007_s12076-019-00241-1
    DOI: 10.1007/s12076-019-00241-1
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    References listed on IDEAS

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    1. Mark Burkey, 2012. "Decomposing geographic accessibility into component parts: methods and an application to hospitals," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(3), pages 783-800, June.
    2. Donald F. Vitaliano, 1992. "An economic assessment of the social costs of highway salting and the efficiency of substituting a new deicing material," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 11(3), pages 397-418.
    3. Donald F. Vitaliano & Mark Toren, 1996. "Hospital Cost and Efficiency in a Regime of Stringent Regulation," Eastern Economic Journal, Eastern Economic Association, vol. 22(2), pages 161-175, Spring.
    4. Vitaliano, Donald F., 2003. "Do not-for-profit firms maximize profit?," The Quarterly Review of Economics and Finance, Elsevier, vol. 43(1), pages 75-87.
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    More about this item

    Keywords

    Hospital location; Efficiency; Not-for-profit; Regulation;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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