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Explaining Differentials in Subsidy Levels among Hospital Ownership Types in Germany

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  • Pilny, Adam

Abstract

German hospitals receive subsidies for investment costs by federal states. Theoretically, these subsidies have to cover the whole investment volume, but in fact only 50%-60% are covered. Balance sheet data show that public hospitals exhibit higher levels of subsidies compared to for-profit hospitals. In this study, I examine the sources of this disparity by decomposing the differential in a so-called facilitation ratio, i.e. the ratio of subsidies to tangible fixed assets, revealing to which extent assets are funded by subsidies. The question of interest is, whether the differential can be attributed to observable hospital-specific and federal state-specific characteristics or unobservable factors.

Suggested Citation

  • Pilny, Adam, 2014. "Explaining Differentials in Subsidy Levels among Hospital Ownership Types in Germany," Ruhr Economic Papers 517, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:517
    DOI: 10.4419/86788592
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    Cited by:

    1. Niklas Potrafke & Felix Roesel, 2020. "The urban–rural gap in healthcare infrastructure: does government ideology matter?," Regional Studies, Taylor & Francis Journals, vol. 54(3), pages 340-351, March.
    2. Avdic, Daniel & Moscelli, Giuseppe & Pilny, Adam & Sriubaite, Ieva, 2019. "Subjective and objective quality and choice of hospital: Evidence from maternal care services in Germany," Journal of Health Economics, Elsevier, vol. 68(C).
    3. Daniel Avdic & Tugba Bueyuekdurmus & Giuseppe Moscelli & Adam Pilny & Ieva Sriubaite, 2018. "Subjective and objective quality reporting and choice of hospital: Evidence from maternal care services in Germany," CINCH Working Paper Series 1803, Universitaet Duisburg-Essen, Competent in Competition and Health.
    4. Adam Pilny & Felix Roesel, 2020. "Are Doctors Better Health Ministers?," American Journal of Health Economics, University of Chicago Press, vol. 6(4), pages 498-532.
    5. Alexander Karmann & Felix Roesel, 2017. "Hospital Policy and Productivity – Evidence from German States," Health Economics, John Wiley & Sons, Ltd., vol. 26(12), pages 1548-1565, December.
    6. Augurzky, Boris & Beivers, Andreas & Emde, Annika & Halbe, Bernd & Pilny, Adam & Straub, Niels & Wuckel, Christiane, 2017. "Stand und Weiterentwicklung der Investitionsförderung im Krankenhausbereich," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 226833.

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    More about this item

    Keywords

    hospitals; subsidies; ownership; Blinder-Oaxaca decomposition;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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