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Consolidating independent hospitals into an integrated health care system often leads to economies of scale in production. This concept refers to the cost advantages that businesses or entities can achieve due to the scale of their operations. When hospitals merge, they can share resources such as staff, technology, and facilities, leading to reduced per-unit costs. This integration allows for streamlined purchasing of supplies and services, improved negotiation power with vendors, and the potential for investing in new technologies at a greater scale, all of which contribute to lower operational costs across the integrated system.

Economies of scale can enhance the financial viability of the integrated health system, enabling it to allocate more resources toward patient care and service improvements. The consolidation may also lead to improved access to clinical best practices and more standardized care, benefiting patient outcomes and increasing overall efficiency within the system.