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Changes in Hospital Efficiency after Privatization

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  • Oliver Tiemann

    () (Universitaet Hamburg)

  • Jonas Schreyögg

    () (Universitaet Hamburg)

Abstract

We investigated the effects of privatization on hospital efficiency in Germany. To do so, we obtained bootstrapped DEA efficiency scores in the first stage of our analysis and subsequently employed a difference-in-difference matching approach within a panel regression framework. Our findings show that conversions from public to private for-profit status were associated with an increase in efficiency of between 3.2 and 5.4%. We defined four alternative post- privatization periods and found that the increase in efficiency after a conversion to private for- profit status appeared to be permanent. We also observed an increase in efficiency one year after hospitals were converted to private non-profit status, but our estimations suggest that this effect was transitory. Our findings also show that the efficiency gains after a conversion to private for-profit status were achieved through substantial decreases in staffing ratios in all analyzed staff categories with the exception of physicians. It was also striking that the efficiency gains of hospitals converted to for-profit status were significantly lower in the DRG era than in the pre-DRG era. Altogether, our results suggest that converting hospitals to private for-profit status may be an effective way to ensure the scarce resources in the hospital sector are used more efficiently.

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  • Oliver Tiemann & Jonas Schreyögg, "undated". "Changes in Hospital Efficiency after Privatization," Working Papers 2011/02, Hamburg Center for Health Economics, University of Hamburg.
  • Handle: RePEc:hch:wpaper:201102
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    Cited by:

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    2. 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.
    3. 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.
    4. Cláudia Araújo & Carlos Barros & Peter Wanke, 2014. "Efficiency determinants and capacity issues in Brazilian for-profit hospitals," Health Care Management Science, Springer, vol. 17(2), pages 126-138, June.
    5. Szromek, Adam R. & Romaniuk, Piotr & Hadzik, Andrzej, 2016. "The privatization of spa companies in Poland – An evaluation of policy assumptions and implementation," Health Policy, Elsevier, vol. 120(4), pages 362-368.
    6. 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.
    7. repec:eee:hepoli:v:122:y:2018:i:2:p:75-80 is not listed on IDEAS
    8. Lindlbauer, Ivonne & Schreyögg, Jonas & Winter, Vera, 2016. "Changes in technical efficiency after quality management certification: A DEA approach using difference-in-difference estimation with genetic matching in the hospital industry," European Journal of Operational Research, Elsevier, vol. 250(3), pages 1026-1036.
    9. 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.
    10. Johannessen, Karl Arne & Kittelsen, Sverre A.C. & Hagen, Terje P., 2017. "Assessing physician productivity following Norwegian hospital reform: A panel and data envelopment analysis," Social Science & Medicine, Elsevier, vol. 175(C), pages 117-126.
    11. Aleksander Aristovnik & Alka Obadic, 2015. "The impact and efficiency of public administration excellence on fostering SMEs in EU countries," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(39), pages 761-761, May.
    12. Hagemejer, Jan & Svejnar, Jan & Tyrowicz, Joanna, 2018. "Are Rushed Privatizations Substandard? Analyzing Firm-level Privatization under Fiscal Pressure," CEPR Discussion Papers 12991, C.E.P.R. Discussion Papers.
    13. 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.
    14. 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.
    15. Amado, Carla A.F. & Santos, Sérgio P. & Serra, Jaime M.M., 2017. "Does partial privatisation improve performance? Evidence from a chain of hotels in Portugal," Journal of Business Research, Elsevier, vol. 73(C), pages 9-19.
    16. Pirozek, Petr & Komarkova, Lenka & Leseticky, Ondrej & Hajdikova, Tatana, 2015. "Corporate governance in Czech hospitals after the transformation," Health Policy, Elsevier, vol. 119(8), pages 1086-1095.

    More about this item

    Keywords

    Privatization; Performance measurement; Data envelopment analysis; Propensity score matching; Germany;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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