Ownership and Financial Performance in the German Hospital Sector

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Ownership and Financial Performance in the German Hospital SectorAbstract This paper considers the role of ownership form for the financial performance of German acute care hospitals and its development over time. We measure financial performance by a hospital-specific yearly probability of default (PD). Using a panel of hospital data, our models allow for state dependence in the PD as well as unobserved individual heterogeneity. We find that private ownership is more likely to be associated with sound levels in financial performance than public ownership. Moreover, state dependence in the PD is substantial, albeit not ownership-specific. Finally, our evidence suggests that overall efficiency may be enhanced most by closing down some loss-making public hospitals rather than by their restructuring, especially because the German hospital market has substantial excess capacities. JEL Classification: I11, I18

Is There a Future for Small Hospitals in Germany?

“…Augurzky et al (2009) find that private for-profit hospitals have a lower risk of default than public hospitals.…”

The Impact of Private Versus Social Health Insurance on Offered Waiting Times in German Acute Care Hospitals

“…This has been estimated and provided by Augurzky et al (2009). The yearly PDs are evaluated on the basis of balance sheets and profit and loss statements from acute care hospitals by the use of a rating tool.…”

“…6 The evaluation of the PD is based on key operating figures, such as liquidity, the debt to equity ratio or current assets. See Augurzky et al (2009) for a more detailed description of the data and the model. 7 The number of hospitals is higher than the number of balance sheets due to the inclusion of hospital chains.…”

Federal state differentials in the efficiency of health production in Germany: an artifact of spatial dependence?

“…Schwierz & Wübker, 2010;Augurzky et al, 2009b;Sundmacher & Busse, 2009). However, the implicit assumption -inherent in conventional regression analyses of regionally aggregated data -of statistically independent observation units becomes almost indefensible.…”

“…Unobserved net patient migration -that is patients provided with services in regions other than the one they reside in -generate a spatial pattern of error correlation, as districts exhibiting net patient inflows provide services to their neighbors which are not accounted for in efficiency measures based on outputs such as reductions in mortality or morbidity. While little is known about patient flows in outpatient care in Germany, Augurzky et al (2009b) provide detailed figures on flows for the hospital sector. Indeed, in some regions the share of patients treated locally is substantially lower than 50%.…”