ABSTRACT
Economy of scope measures the relationship between costs and product mix. The product mix, for example, is inpatient and outpatient care and whether it is cheaper to combine both or cheaper if they are separated. M. Weaver and A. Deolalikar calculates the economy of scale and scope of hospitals in a developing country, namely Vietnam. In this study, the dependent variable that becomes the total costs variable is the total expenditures of the staff; drugs, medical supplies; maintenance; and other expenses. Hospitals require huge capital investment in buildings, tools, and staff. The relationship between the cost and scale can be in the short or long term. A short-term function acts in order for the number of beds not to change, and all the efficiency advantages are collected on the variable factors. A long-term function, the number of beds will also change along with other factors so that efficiency can increase.
