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Ownership and Financial Performance in the German Hospital Sector

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  • Boris Augurzky

    ()

  • Dirk Engel
  • Christoph M. Schmidt
  • Christoph Schwierz

Abstract

This paper considers the role of ownership form for the financial performance of German acute care hospitals and its development over time.We measure financial performance by a hospital-specific yearly probability of default (PD). Using a panel of hospital data, our models allow for state dependence in the PD as well as unobserved individual heterogeneity. We find that private ownership is more likely to be associated with sound levels in financial performance than public ownership. Moreover, state dependence in the PD is substantial, albeit not ownership-specific.Finally, our evidence suggests that overall efficiency may be enhanced most by closing down some loss-making public hospitals rather than by their restructuring, especially because the German hospital market has substantial excess capacities.

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Bibliographic Info

Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0123.

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Length: 27 pages
Date of creation: Jul 2009
Date of revision:
Handle: RePEc:rwi:repape:0123

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Keywords: Hospitals ownership; financial performance; state dependence;

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References

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  1. Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
  2. Boris Augurzky & Rüdiger Budde & Sebastian Krolop & Christoph M. Schmidt & Hartmut Schmidt & Hendrik Schmitz & Christoph Schwierz & Stefan Terkatz, 2008. "Krankenhaus Rating Report 2008 - Qualität und Wirtschaftlichkeit," RWI Materialien, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, pages 150, 04.
  3. Giovanni S. F. Bruno, 2005. "Estimation and inference in dynamic unbalanced panel-data models with a small number of individuals," Stata Journal, StataCorp LP, vol. 5(4), pages 473-500, December.
  4. Virginia Wilcox-Gok, 2002. "The effects of for-profit status and system membership on the financial performance of hospitals," Applied Economics, Taylor & Francis Journals, vol. 34(4), pages 479-489.
  5. Henry Hansmann & Daniel Kessler & Mark B. McClellan, 2003. "Ownership Form and Trapped Capital in the Hospital Industry," NBER Chapters, in: The Governance of Not-for-Profit Organizations, pages 45-70 National Bureau of Economic Research, Inc.
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  9. Yu-Chu Shen & Karen Eggleston & Joseph Lau & Christopher Schmid, 2005. "Hospital Ownership and Financial Performance: A Quantitative Research Review," NBER Working Papers 11662, National Bureau of Economic Research, Inc.
  10. Marcus Tamm & Harald Tauchmann & Jürgen Wasem & Stefan Gre�, 2007. "Elasticities of market shares and social health insurance choice in germany: a dynamic panel data approach," Health Economics, John Wiley & Sons, Ltd., vol. 16(3), pages 243-256.
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Cited by:
  1. Christoph Schwierz & Achim Wübker & Ansgar Wübker & Björn Kuchinke, 2011. "Discrimination in waiting times by insurance type and financial soundness of German acute care hospitals," The European Journal of Health Economics, Springer, vol. 12(5), pages 405-416, October.
  2. Christoph Schwierz & Ansgar Wübker & Björn A. Kuchinke, 2009. "The Impact of Private versus Social Health Insurance on Offered Waiting Times in German Acute Care Hospitals," Ruhr Economic Papers 0120, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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