Financial performance and agglomeration economies in the hospital sector

Abstract

Healthcare expenses constitute serious economic burdens to state budgets. The largest part of healthcare expenditures is usually dedicated to the hospital sector. That is why analyzing factors that can have an impact on the performance of hospitals seems to be of a great importance. There can be found diverse economic theories and models – including the background of agglomeration economies – aimed at explaining the performance of hospitals. From the agglomeration economies’ perspective the place of location might have a serious impact on a general situation of a particular entity. The problem of a proper location of an enterprise is quite often analyzed dividing companies for the ones operating inside or outside big cities. However, in case of hospitals it is still an open question if the place of location might have a serious influence on the economic outcomes – especially the obtained financial results. One of the most suitable tools analyzing such influence are either economic or econometric models. This article is aimed at assessing the current state of knowledge and presenting potential research gap in the analyzed matter, which should be fulfilled by the further empirical studies. As it is revealed in the article there exists a research gap concerning models conducted on the background of agglomeration economies explaining financial performance of hospitals.