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Expansion in markets with decreasing demand‐for‐profits in the German hospital industry

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  • Christoph Schwierz

Abstract

Over the last 20 years, acute-care hospitals in most OECD countries have built up costly overcapacities. From the perspective of economic policy, it is desirable to know how hospitals of different ownership forms respond to changes in demand and are probably best suited to deal with existing overcapacities. This article examines ownership‐specific differences in the responsiveness to changes in demand for hospital services in Germany between 1996 and 2006. With respect to the speed of adaptation to increasing demand, the study finds for‐profit ownership to be superior to public and nonprofit ownership. However, contrary to other ownership types, for‐profits also tend to expand in markets with decreasing demand – mainly through conversions of publicly owned hospitals. Thus, in short term, the privatization of the hospital sector may slow down the reduction of excess capacities and be therefore socially wasteful. Copyright (C) 2010 John Wiley & Sons, Ltd.

Suggested Citation

  • 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.
  • Handle: RePEc:wly:hlthec:v:20:y:2011:i:6:p:675-687
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    File URL: http://hdl.handle.net/10.1002/hec.1624
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    10. Augurzky, Boris & Krolop, Sebastian & Gülker, Rosemarie & Schmidt, Christoph M. & Schmidt, Hartmut & Schmitz, Hendrik & Schwierz, Christoph & Terkatz, Stefan, 2009. "Krankenhaus Rating Report 2009: Im Auge des Organs," RWI Materialien 53, RWI - Leibniz-Institut für Wirtschaftsforschung.
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    13. repec:zbw:rwimat:053 is not listed on IDEAS
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    Cited by:

    1. repec:zbw:rwirep:0517 is not listed on IDEAS
    2. Adam Pilny, 2014. "Mergers and Acquisitions in the German Hospital Market – Who are the Targets?," Ruhr Economic Papers 0518, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    3. Paloyo, Alfredo R., 2009. "Co-pay and Feel Okay: Evidence of Illusory Health Gains from a Health Insurance Reform," Ruhr Economic Papers 142, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. repec:wly:hlthec:v:26:y:2017:i:5:p:566-581 is not listed on IDEAS
    5. Pilny, Adam, 2014. "Mergers and Acquisitions in the German Hospital Market – Who are the Targets?," Ruhr Economic Papers 518, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    6. Adam Pilny, 2014. "Explaining Differentials in Subsidy Levels among Hospital Ownership Types in Germany," Ruhr Economic Papers 0517, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    7. Adam Pilny, 2017. "Explaining Differentials in Subsidy Levels Among Hospital Ownership Types in Germany," Health Economics, John Wiley & Sons, Ltd., vol. 26(5), pages 566-581, May.
    8. 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.
    9. repec:zbw:rwirep:0518 is not listed on IDEAS

    More about this item

    Keywords

    hospital ownership ; privatization ; hospital market structure ;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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