The cost of excess capacity in the hospital industry has reemerged as an important policy issue. Utilized capacity in the hospital industry, as measured by the inpatient hospital bed occupancy rate, has declined over the past 10 years and now stands at approximately 65 percent. Congress and the...

One of the fundamental facts of the environment hospitals face is uncertainty over demand for their services. This uncertainty leads hospitals to hold excess standby capacity to avoid turning away patients. In this paper we reformulate the theory of cost and production to take account of this...

One of the fundamental facts of the environment hospitals face is uncertainty over demand for their services. This uncertainty leads hospitals to hold excess standby capacity to avoid turning away patients. In this paper we reformulate the theory of cost and production to take account of this...

The cost of excess capacity in the hospital industry has reemerged as an important policy issue. Utilized capacity in the hospital industry, as measured by the inpatient hospital bed occupancy rate, has declined over the past 10 years and now stands at approximately 65 percent. Congress and the...