Diseconomies of scale are generally realized when hospitals reach the size of more than 500 beds. If an organization of this size still stays in business, it must be maintaining efficiency for a limited range of more-specialized services, while most likely not being able to provide less-specialized services efficiently.

Question

Quizplus · Accepted Answer

Diseconomies of scale occur when an organization becomes so large that the costs per unit increase. For hospitals, this can mean that beyond a certain size (such as 500 beds), they may become less efficient in providing less-specialized services due to complexities and coordination issues, while possibly maintaining efficiency in more-specialized services due to their scale and expertise in those areas.

Diseconomies of Scale Are Generally Realized When Hospitals Reach the Size