Discuss the economic concepts of economies of scale and economies of scope as they relate to potential differences in productive efficiency between specialty and general hospitals.

The Health Reform Law (ACA) includes a provision to prohibit physicians having any ownership interes Show more The Health Reform Law (ACA) includes a provision to prohibit physicians having any ownership interest in specialty hospitals (e.g. those primarily providing cardiac surgery or orthopedic surgery etc.) from receiving Medicare payment for any services they provide in such hospitals.
A previous moratorium on opening new specialty hospitals reflected two concerns: a) specialty hospitals were treating less severe and more profitable patients [cream skimming] which was adversely affecting the financial stability of general hospitals in the same service area; and b) physicians practicing at specialty hospitals often also were investors in the hospitals creating a financial conflict of interest. a.Discuss the economic concepts of economies of scale and economies of scope as they relate to potential differences in productive efficiency between specialty and general hospitals. Show less