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Profit efficiency and ownership of German hospitals

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  • Annika Herr
  • Hendrik Schmitz
  • Boris Augurzky

Abstract

This paper investigates the cost and profit efficiency of German hospitals and their variation with ownership type. It is motivated by the empirical finding that private (for‐profit) hospitals – having been shown to be less cost efficient in the past – on average earn higher profits than public hospitals. We conduct a Stochastic Frontier Analysis on a multifaceted administrative German data set combined with the balance sheets of 541 hospitals of the years 2002–2006. The results show no significant differences in cost efficiency but higher profit efficiency of private than of publicly owned hospitals. Copyright © 2010 John Wiley & Sons, Ltd.

Suggested Citation

  • Annika Herr & Hendrik Schmitz & Boris Augurzky, 2011. "Profit efficiency and ownership of German hospitals," Health Economics, John Wiley & Sons, Ltd., vol. 20(6), pages 660-674, June.
    • Handle: RePEc:wly:hlthec:v:20:y:2011:i:6:p:660-674
    DOI: 10.1002/hec.1622
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