Evaluating the Effect of Economies of Scale and Learning in Health Sector: Case of Developed and Developing Countries

The workforce is considered one of the most important factors of economic growth and development, and thus ensuring their health is very important. The learning process means saving labor costs and increasing productivity through experience. The experience of countries around the world has shown that with increasing scale, the average cost decreases due to economies of scale and learning, and this facilitates access to health services for people in the community at lower costs.
The methodology used in the present study was developed based on econometrics. To this end, a model was developed and estimated based on the theoretical literature and previous studies. Then, using inferential statistical techniques and the data from 187 countries extracted from the World Bank database, two concepts of economies of scale and learning were quantified.
The results indicated that, firstly, economies of scale have been achieved in the health sectors of the counties in question, but have not yet been completely exhausted while the learning process has been realized at a rate of 0.46. Second, in developed countries, the production coefficient is close to one and insignificant, indicating that all economies of scale have been exhausted. Besides, the learning coefficient is above the global average. Third, in developing countries, a negative and significant production coefficient and the average scale indicates a lack of complete exhaustion of economies of scale. Moreover, in these countries, the realized economies of learning outweigh the economies of scale.
Learning and economies of scale rates in developed and developing countries are different from each other, indicating the efficiency of both components of the cost advantage in reducing costs.