Economies and diseconomies of scale in residential services for people with ID

Aims: Beliefs about economies of scale dominate discussion about the design of residential services for people with intellectual disabilities. This paper explores the nature of economies and diseconomies of scale and evaluates the available evidence.

Methods: The paper examines the logic of economies of scale and how they might apply in human services. It notes that there are very wide unexplained variations in costs of residential services of the same type. It identifies the limitations of economies of scale and the conflicts between economy and the purpose of providing supported accommodation. It evaluates available evidence about economies and diseconomies of scale in the light of this critique.

Results: Revenue costs are heavily influenced by staffing levels, so that apparent economies of scale often actually involve reduced assistance for the people served; and that the goals of residential services cannot all be met if scale economies are pursued.

Conclusions: The paper concludes that clarity of service goals and their operationalization in terms of the lives of people with intellectual disabilities offers a more useful basis for service planning than pursuing alleged optimal size of residential units.