Arrangements with the NHS for providing healthcare services: do they improve financial performance of private for-profit hospitals in Spain?

Abstract

Background In developed countries around the world there is a trend to enhance the public-private collaboration in healthcare. In Spain, a decentralized country with a NHS funded with taxes and universal coverage, commissioning to for-profit private hospitals the production of healthcare services to specific patients that are publicly insured is a traditional practice. Around 43% of the for-profit private hospitals in Spain have a commissioning agreement with the NHS to diagnose or treat patients on public tariffs. These revenues represent 26% of the total revenues of private for-profit hospitals. The research question of this study is if commissioning with the NHS improves the financial performance of private-for-profit hospitals in Spain. Methods With a long panel (2000–2017) of for-profit hospitals we estimate a model for the financial performance (return on assets) using commissioning as main explanatory variable and other variables as control (variables financial indicators and structural information). Specific models are estimated for subgroups of hospitals according to size and specialization. The models are estimated by panel regression with fixed effects and GMM as robustness. Results Private for-profit hospitals that have commissioning with NHS obtain higher financial performance than no-commissioning hospitals. This effect varies depending on hospital size and type (hospital specialization), the advantage being more relevant for general hospitals and particularly for hospital with at least 50 beds. Conclusions Commissioning with the NHS is a promising source of financial profitability for general acute private for-profit hospitals. The evidence provided by this study may orientate the NHS in the regulation and negotiation of commissioning contracts in healthcare.

Nursing Homes: Affiliation to Large Chains, Quality and Public–Private Collaboration

“…Following this theory, the contracts between the public and private sectors try to reduce the information asymmetries, and their effectiveness will depend on the relationship between the obtained benefits and the costs associated with the definition and proper supervision of those contracts [ 41 ]. For the private healthcare sector, this commissioning may increase potential demand, contributing to the improved performance of healthcare providers, as long as they are able to contain costs and align public tariffs for commissioned services [ 24 ]. Regarding quality, [ 38 ] concludes that there is a positive relationship between reimbursement and quality in most NHs in the USA.…”

“…Secondly, in Spain, the 10 biggest chains of NHs by revenue manage 27% of places in the private sector, rising to 35% for the 20 biggest [ 23 ]. Thirdly, commissioning agreements represent a traditional form of public–private collaboration in the Spanish healthcare industry [ 24 ]. In 2020, in Spain, 36% of total private NHs were commissioned [ 25 ].…”