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Ownership and Financial Performance in the German Hospital Sector

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  • Augurzky, Boris
  • Engel, Dirk
  • Schmidt, Christoph M.
  • Schwierz, Christoph

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.

Suggested Citation

  • Augurzky, Boris & Engel, Dirk & Schmidt, Christoph M. & Schwierz, Christoph, 2009. "Ownership and Financial Performance in the German Hospital Sector," Ruhr Economic Papers 123, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:123
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    References listed on IDEAS

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    Cited by:

    1. Schwierz, Christoph & Wübker, Ansgar & Kuchinke, Björn A., 2009. "The Impact of Private versus Social Health Insurance on Offered Waiting Times in German Acute Care Hospitals," Ruhr Economic Papers 120, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. 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;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(5), pages 405-416, October.
    3. Augurzky, Boris & Schmitz, Hendrik, 2010. "Is there a Future for Small Hospitals in Germany?," Ruhr Economic Papers 198, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Annika Herr & Hendrik Schmitz & Boris Augurzky, 2011. "Profit efficiency and ownership of German hospitals," Health Economics, John Wiley & Sons, Ltd., vol. 20(6), pages 660-674, June.
    5. María Victoria Ruiz-Mallorquí & Inmaculada Aguiar-Díaz & Beatriz González- López Valcárcel, 2021. "Arrangements with the NHS for providing healthcare services: do they improve financial performance of private for-profit hospitals in Spain?," Health Economics Review, Springer, vol. 11(1), pages 1-12, December.
    6. Boris Augurzky & Hendrik Schmitz, 2010. "Is there a Future for Small Hospitals in Germany?," Ruhr Economic Papers 0198, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    7. repec:zbw:rwirep:0120 is not listed on IDEAS
    8. Christoph Schwierz, 2011. "Expansion in markets with decreasing demand‐for‐profits in the German hospital industry," Health Economics, John Wiley & Sons, Ltd., vol. 20(6), pages 675-687, June.
    9. 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.
    10. repec:zbw:rwirep:0198 is not listed on IDEAS

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    More about this item

    Keywords

    Hospitals ownership; financial performance; state dependence;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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