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Explaining Differentials in Subsidy Levels Among Hospital Ownership Types in Germany

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  • Adam Pilny

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.
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Suggested Citation

  • 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.
  • Handle: RePEc:wly:hlthec:v:26:y:2017:i:5:p:566-581
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    Cited by:

    1. Karmann, Alexander & Roesel, Felix, 2016. "Hospital policy and productivity: Evidence from German states," CEPIE Working Papers 07/16, Technische Universität Dresden, Center of Public and International Economics (CEPIE).

    More about this item

    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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