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Hospital ownership, reimbursement systems and mortality rates

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  • Carine Milcent

Abstract

This paper analyses the effect of ownership and system of reimbursement on mortality rates. From the statistical results we could conclude that the incentive created by fee‐for‐service reimbursement yields a four‐point reduction in the mortality rate. However, this ranking of hospital quality is completely dependent on the characteristics and illness severity of patients. To take this difficulty into account, we use an innovative duration model applied to panel data: a duration model with both patient and hospital unobserved heterogeneity. No distributional assumptions are made regarding the latter. By this way, we control the fact that patients admitted to the private sector can be different in terms of disease severity from patients admitted to the public sector. The capacity to perform innovative procedures has more effect on the mortality than the system of reimbursement and/or ownership. As such, private sector hospitals that perform more innovative procedures provide a better quality of care, measured by the probability of dying. Nevertheless, heterogeneity within hospitals is greater in for‐profit hospitals than in other types of hospital. This suggests that, by choosing a for‐profit hospital, patients have on average a lower instantaneous probability of dying but are less sure about the quality of the hospital. Copyright © 2005 John Wiley & Sons, Ltd.

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  • Carine Milcent, 2005. "Hospital ownership, reimbursement systems and mortality rates," Health Economics, John Wiley & Sons, Ltd., vol. 14(11), pages 1151-1168, November.
  • Handle: RePEc:wly:hlthec:v:14:y:2005:i:11:p:1151-1168
    DOI: 10.1002/hec.1010
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    1. Laurent Gobillon & Carine Milcent, 2013. "Spatial disparities in hospital performance," Journal of Economic Geography, Oxford University Press, vol. 13(6), pages 1013-1040, November.
    2. Moscone, Francesco & Siciliani, Luigi & Tosetti, Elisa & Vittadini, Giorgio, 2020. "Do public and private hospitals differ in quality? Evidence from Italy," Regional Science and Urban Economics, Elsevier, vol. 83(C).
    3. Hentschker, Corinna & Mennicken, Roman, 2014. "Selective-referral and unobserved patient heterogeneity - Bias in the volume-outcome relationship," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100299, Verein für Socialpolitik / German Economic Association.
    4. Corinna Hentschker & Roman Mennicken & Antonius Reifferscheid & Jürgen Wasem & Ansgar Wübker, 2018. "Volume-outcome relationship and minimum volume regulations in the German hospital sector – evidence from nationwide administrative hospital data for the years 2005–2007," Health Economics Review, Springer, vol. 8(1), pages 1-14, December.
    5. repec:zbw:rwirep:0527 is not listed on IDEAS
    6. Corinna Hentschker & Roman Mennicken, 2015. "The Volume‐Outcome Relationship and Minimum Volume Standards – Empirical Evidence for Germany," Health Economics, John Wiley & Sons, Ltd., vol. 24(6), pages 644-658, June.
    7. Mareike Heimeshoff & Jonas Schreyögg & Oliver Tiemann, 2014. "Employment effects of hospital privatization in Germany," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(7), pages 747-757, September.
    8. Corinna Hentschker & Roman Mennicken, 2012. "The Relationship between Quality and Hospital Case Volume – An Empirical Examination with German Data," Ruhr Economic Papers 0341, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    9. Brigitte Dormont & Carine Milcent, 2012. "Comment évaluer la productivité et l'efficacité des hôpitaux publics et privés ? Les enjeux de la convergence tarifaire," Économie et Statistique, Programme National Persée, vol. 455(1), pages 143-173.
    10. Moscelli, Giuseppe & Gravelle, Hugh & Siciliani, Luigi & Gutacker, Nils, 2018. "The effect of hospital ownership on quality of care: Evidence from England," Journal of Economic Behavior & Organization, Elsevier, vol. 153(C), pages 322-344.
    11. Carine Milcent, 2023. "The sorting effect in healthcare access: Those left behind," Working Papers hal-03960599, HAL.
    12. Brekke, Kurt Richard & Siciliani, Luigi, 2011. "Quality competition with profit constraints: Do non-profit firms provide higher quality than for-profit firms?," CEPR Discussion Papers 8284, C.E.P.R. Discussion Papers.
    13. Hentschker, Corinna & Mennicken, Roman, 2012. "The Relationship between Quality and Hospital Case Volume – An Empirical Examination with German Data," Ruhr Economic Papers 341, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    14. Paul H. Jensen & Elizabeth Webster & Julia Witt, 2009. "Hospital type and patient outcomes: an empirical examination using AMI readmission and mortality records," Health Economics, John Wiley & Sons, Ltd., vol. 18(12), pages 1440-1460, December.
    15. Martine Bellanger & Laurent Tardif, 2006. "Accounting and reimbursement schemes for inpatient care in France," Health Care Management Science, Springer, vol. 9(3), pages 295-305, August.
    16. Corinna Hentschker & Roman Mennicken, 2014. "Selective-referral and Unobserved Patient Heterogeneity – Bias in the Volume-outcome Relationship," Ruhr Economic Papers 0527, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    17. Laurent Gobillon & Carine Milcent, 2008. "Regional disparities in mortality by heart attack: evidence from France," Working Papers halshs-00586837, HAL.
    18. repec:dau:papers:123456789/7738 is not listed on IDEAS
    19. Luigi Siciliani & Peter Sivey & Andrew Street, 2011. "Differences in Length of Stay between Public Hospitals, Treatment Centres and Private Providers: Selection or Efficiency?," Melbourne Institute Working Paper Series wp2011n06, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    20. Brekke, Kurt R. & Siciliani, Luigi & Straume, Odd Rune, 2012. "Quality competition with profit constraints," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 642-659.
    21. repec:zbw:rwirep:0341 is not listed on IDEAS

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