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Private or public hospital ownership: Does it really matter?

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  • Bjorvatn, Afsaneh

Abstract

Incentives to improve hospital performance under prospective payments may come at a cost. First, there may be a strong incentive for hospitals to choose only low-severity patients. Second, hospitals may have an incentive to reduce the quality of care. I analyze the role of hospital ownership on patient selection and quality of care by comparing private nonprofit and public hospitals. The analysis is performed by using unique hospital admission data for cardiovascular procedures in Norway, covering the period from 1999 to 2006. Matching techniques are applied to control for patient heterogeneity. The econometric analyses are based on binary probit and ordinary least squares regression models. The results indicate that private nonprofit hospitals have specialized in certain procedures. These hospitals are also more likely to admit low-severity patients for some procedures. The association between quality of care and hospital ownership is mixed since private nonprofit hospitals both offer shorter waiting time and shorter length of stay.

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  • Bjorvatn, Afsaneh, 2018. "Private or public hospital ownership: Does it really matter?," Social Science & Medicine, Elsevier, vol. 196(C), pages 166-174.
    • Handle: RePEc:eee:socmed:v:196:y:2018:i:c:p:166-174
    DOI: 10.1016/j.socscimed.2017.11.038
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    1. Moscone, Francesco & Siciliani, Luigi & Tosetti, Elisa & Vittadini, Giorgio, 2020. "Do public and private hospitals differ in quality? Evidence from Italy," Regional Science and Urban Economics, Elsevier, vol. 83(C).
    2. Murphy, Aileen & Bourke, Jane & Turner, Brian, 2020. "A two-tiered public-private health system: Who stays in (private) hospitals in Ireland?," Health Policy, Elsevier, vol. 124(7), pages 765-771.
    3. Stefano Quarta & Skerdilajda Zanaj, 2018. "Health and Pollution in a Vertically Differentiated Duopoly," DEM Discussion Paper Series 18-20, Department of Economics at the University of Luxembourg.
    4. Marin-Pantelescu Andreea & Hint Mihaela, 2020. "Romanian customers’ satisfactions regarding private health services," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 14(1), pages 788-796, July.
    5. Levaggi, Laura & Levaggi, Rosella, 2020. "Is there scope for mixed markets in the provision of hospital care?," Social Science & Medicine, Elsevier, vol. 247(C).

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    More about this item

    Keywords

    Prospective payments; Incentives; Selection; Cream skimming; Skimping; Quality of care; I11; I18;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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