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Cost efficiency, factor interchange, and technical progress in US specialized hospital pharmacies

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  • Albert A. Okunade
  • Chutima Suraratdecha

Abstract

Specialized hospitals perform unique, technologically more complex, and relatively expensive medical procedures. Growing use of high‐cost biotechnology drugs and increased clinical pharmacy tasks at these facilities have increased costs. This paper used a unique data set supplied by Eli Lilly, and a dual translog cost system to model the costs of specialized hospital pharmacy production. Results show that the potential substitution of pharmacy technicians for registered pharmacists and the decomposed technical change savings effects of expensive factors of production offer the greatest opportunities for containing costs. Slight diseconomies of scale were also observed. © 1998 John Wiley & Sons, Ltd.

Suggested Citation

  • Albert A. Okunade & Chutima Suraratdecha, 1998. "Cost efficiency, factor interchange, and technical progress in US specialized hospital pharmacies," Health Economics, John Wiley & Sons, Ltd., vol. 7(4), pages 363-371, June.
    • Handle: RePEc:wly:hlthec:v:7:y:1998:i:4:p:363-371
    DOI: 10.1002/(SICI)1099-1050(199806)7:4<363::AID-HEC346>3.0.CO;2-Q
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    References listed on IDEAS

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    Cited by:

    1. Gregory G. Lubiani & Albert A. Okunade, 2013. "Production Cost Structure In Us Outpatient Physical Therapy Health Care," Health Economics, John Wiley & Sons, Ltd., vol. 22(2), pages 212-223, February.
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    3. Albert A. Okunade, 2003. "Are Factor Substitutions in HMO Industry Operations Cost Saving?," Southern Economic Journal, John Wiley & Sons, vol. 69(4), pages 800-821, April.
    4. Albert Okunade & Vasudeva Murthy, 2008. "Are physician and non-physician providers of outpatient mental healthcare substitutes or complements? a conceptual clarification," Health Care Management Science, Springer, vol. 11(4), pages 393-398, December.

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