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Profit efficiency and ownership of German hospitals

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  • Annika Herr
  • Hendrik Schmitz
  • Boris Augurzky

Abstract

This paper investigates the cost and profit efficiency of German hospitals and their variation with ownership type. It is motivated by the empirical finding that private (for-profit) hospitals – having been shown to be less cost efficient in the past – on average earn higher profits than public hospitals. We conduct a Stochastic Frontier Analysis on a multifaceted administrative German data set combined with the balance sheets of 541 hospitals of the years 2002–2006. The results show no significant differences in cost efficiency but higher profit efficiency of private than of publicly owned hospitals. Copyright (C) 2010 John Wiley & Sons, Ltd.

Suggested Citation

  • 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.
  • Handle: RePEc:wly:hlthec:v:20:y:2011:i:6:p:660-674
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    File URL: http://hdl.handle.net/10.1002/hec.1622
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    1. repec:kap:hcarem:v:20:y:2017:i:3:d:10.1007_s10729-016-9359-1 is not listed on IDEAS
    2. repec:dau:papers:123456789/12066 is not listed on IDEAS
    3. Thomas Czypionka & Markus Kraus & Susanne Mayer & Gerald Röhrling, 2014. "Efficiency, ownership, and financing of hospitals: The case of Austria," Health Care Management Science, Springer, vol. 17(4), pages 331-347, December.
    4. Stefan Meyer, 2015. "Payment schemes and cost efficiency: evidence from Swiss public hospitals," International Journal of Health Economics and Management, Springer, vol. 15(1), pages 73-97, March.
    5. Jos Blank & Evelien Eggink, 2014. "The impact of policy on hospital productivity: a time series analysis of Dutch hospitals," Health Care Management Science, Springer, vol. 17(2), pages 139-149, June.
    6. Helmut Herwartz & Christoph Strumann, 2014. "Hospital efficiency under prospective reimbursement schemes: an empirical assessment for the case of Germany," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(2), pages 175-186, March.
    7. Vera Antonia Büchner & Vera Hinz & Jonas Schreyögg, 2016. "Health systems: changes in hospital efficiency and profitability," Health Care Management Science, Springer, vol. 19(2), pages 130-143, June.
    8. Oliver Tiemann & Jonas Schreyögg, 2012. "Changes in hospital efficiency after privatization," Health Care Management Science, Springer, vol. 15(4), pages 310-326, December.
    9. repec:kap:hcarem:v:20:y:2017:i:2:d:10.1007_s10729-015-9349-8 is not listed on IDEAS
    10. Carine Milcent & Brigitte Dormont, 2017. "Ownership and Hospital Productivity
      [Productivité et l’efficacité des hôpitaux publics et privés]
      ," PSE Working Papers hal-01521269, HAL.
    11. Ivonne Lindlbauer & Jonas Schreyögg, 2014. "The relationship between hospital specialization and hospital efficiency: do different measures of specialization lead to different results?," Health Care Management Science, Springer, vol. 17(4), pages 365-378, December.
    12. 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.
    13. Mareike Heimeshoff & Jonas Schreyögg & Lukas Kwietniewski, 2014. "Cost and technical efficiency of physician practices: a stochastic frontier approach using panel data," Health Care Management Science, Springer, vol. 17(2), pages 150-161, June.
    14. Augurzky, Boris & Schmitz, Hendrik, 2013. "Wissenschaftliche Untersuchung zu den Ursachen unterschiedlicher Basisfallwerte der Länder als Grundlage der Krankenhausfinanzierung," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 111432.
    15. Tiemann, Oliver & Schreyögg, Jonas & Busse, Reinhard, 2012. "Hospital ownership and efficiency: A review of studies with particular focus on Germany," Health Policy, Elsevier, vol. 104(2), pages 163-171.
    16. Stefan Felder & Harald Tauchmann, 2013. "Federal state differentials in the efficiency of health production in Germany: an artifact of spatial dependence?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(1), pages 21-39, February.
    17. Annika Herr, 2011. "Quality and Welfare in a Mixed Duopoly with Regulated Prices: The Case of a Public and a Private Hospital," German Economic Review, Verein für Socialpolitik, vol. 12(4), pages 422-437, November.
    18. Helmut Herwartz & Christoph Strumann, 2012. "On the effect of prospective payment on local hospital competition in Germany," Health Care Management Science, Springer, vol. 15(1), pages 48-62, March.
    19. Varabyova, Yauheniya & Schreyögg, Jonas, 2013. "International comparisons of the technical efficiency of the hospital sector: Panel data analysis of OECD countries using parametric and non-parametric approaches," Health Policy, Elsevier, vol. 112(1), pages 70-79.
    20. repec:kap:hcarem:v:21:y:2018:i:1:d:10.1007_s10729-016-9378-y is not listed on IDEAS
    21. 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.
    22. repec:dau:papers:123456789/7738 is not listed on IDEAS

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