The estimation of production function in Orumieh Medical Sciences University hospitals

Abstract Hospital is known as an important and the most costly performing unit of health care systems, therefore, economic analysis of this unit is very important This study designed to estimate hospital production function in Orumieh Medical Sciences University hospitals. for this study 16 hospitals were studied. We used panel data for estimation of mentioned function, data were gathered from 2000 to 2006. A double- logged form of the Cobb-Douglas production function has been estimated. The dependent variable is inpatient admissions, the explanatory variables that are included are the umber of doctors, nurses, beds, other staffs and average length of stay (ALOS). As a result of study the elasticity of doctors is EY. P =1.08, the elasticity of nurses is EY. N =3.4, the elasticity of beds is EY. B =1.4, and the elasticity of other staffs is EY. P P =2.8. There was not significant correlation between ALOS and the number of admission. The marginal production of inputs are MPP =391, MPN=244, MPB=103, MPP P =273, and, there is an increasing return to scale. Also, we have investigated MRTS1 between production factors. Results of this study show that, the maximum elasticity is attributable to the number of nurses and then respectively to, other staffs, beds and doctors. The marginal production of inputs shows an important role of doctors in production. The decision makers, in critical circumstances can substitute inputs with considering MRTS between inputs. There is an increasing economic of scale and in long-term there will be a monopolistic competition market, therefore, for achievement to equity issue, the intervention of government in this hospitals market is necessary.