Economies of scale in blood banking: a study based on data envelopment analysis

Exploitation of economies of scale is often argued in favour of blood-bank consolidation into large regional centres, despite a lack of adequate empirical support. This study was aimed at testing the economies of scale hypothesis in a sample of blood centres in the USA.

An input-orientated data envelopment analysis (DEA) was used to calculate the technical efficiency scores of blood centres, and to determine whether they were operating under increasing returns to scale (IRS), constant returns to scale (CRS) or decreasing returns to scale (DRS). Correlation between the blood-centre efficiency score and the demographic and socioeconomic characteristics of the service area was further investigated.

Seventy-one blood centres were included in the analysis. The scale of operations ranged from 7270 to 275,500 red blood cell (RBC) units per year. Six (8%) centres operated under CRS, 29 (55%) under IRS, and most of their technical inefficiency was scale-independent, and 26 (37%) operated under DRS, and most of their technical inefficiency was size-related. Efficiency scores were unrelated to any demographic or socioeconomic characteristics of the blood centre service area.

Within the size range of blood centres included in this study, expanding the level of operations beyond a certain point leads to DRS.