Changes in hospital efficiency after privatization

We investigated the effects of privatization on hospital efficiency in Germany. To do so, we obtained bootstrapped data envelopment analysis (DEA) efficiency scores in the first stage of our analysis and subsequently employed a difference-in-difference matching approach within a panel regression fra...

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Published in:	Health care management science Vol. 15; no. 4; pp. 310 - 326
Main Authors:	Tiemann, Oliver, Schreyögg, Jonas
Format:	Journal Article
Language:	English
Published:	Boston Springer US 01.12.2012 Springer Science + Business Media Springer Nature B.V
Subjects:	Business and Management Conversion Data envelopment analysis Data-Envelopment-Analyse Deutschland Diagnosis-Related Groups Econometrics Efficiency Efficiency, Organizational - statistics & numerical data Effizienz Germany Health Administration Health economics Health Informatics Hospital Administration - statistics & numerical data Hospitals Humans Investigations Krankenhaus Management Market shares Nonprofit organizations Operations Research/Decision Theory Performance management Personnel Staffing and Scheduling - statistics & numerical data Privatisierung Privatization Privatization - organization & administration Privatization - statistics & numerical data Profit margins Propensity Score Regional government Regression Analysis Studies Time Factors Workforce planning Germany Propensity score matching Hospitals Privatization Performance measurement Germany Data envelopment analysis
ISSN:	1386-9620, 1572-9389
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Abstract	We investigated the effects of privatization on hospital efficiency in Germany. To do so, we obtained bootstrapped data envelopment analysis (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 2.9 and 4.9%. 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 for the first three years after hospitals were converted to private non-profit status, but our estimations suggest that this effect was rather 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 and administrative staff. It was also striking that the efficiency gains of hospitals converted to for-profit status were significantly lower in the diagnosis-related groups (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.
AbstractList	We investigated the effects of privatization on hospital efficiency in Germany. To do so, we obtained boot-strapped data envelopment analysis (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 2.9 and 4.9%. 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 for the first three years after hospitals were converted to private non-profit status, but our estimations suggest that this effect was rather 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 and administrative staff. It was also striking that the efficiency gains of hospitals converted to for-profit status were significantly lower in the diagnosis-related groups (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. We investigated the effects of privatization on hospital efficiency in Germany. To do so, we obtained bootstrapped data envelopment analysis (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 2.9 and 4.9%. 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 for the first three years after hospitals were converted to private non-profit status, but our estimations suggest that this effect was rather 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 and administrative staff. It was also striking that the efficiency gains of hospitals converted to for-profit status were significantly lower in the diagnosis-related groups (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. [PUBLICATION ABSTRACT] We investigated the effects of privatization on hospital efficiency in Germany. To do so, we obtained bootstrapped data envelopment analysis (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 2.9 and 4.9%. 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 for the first three years after hospitals were converted to private non-profit status, but our estimations suggest that this effect was rather 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 and administrative staff. It was also striking that the efficiency gains of hospitals converted to for-profit status were significantly lower in the diagnosis-related groups (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. We investigated the effects of privatization on hospital efficiency in Germany. To do so, we obtained boot-strapped data envelopment analysis (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 2.9 and 4.9%. 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 for the first three years after hospitals were converted to private non-profit status, but our estimations suggest that this effect was rather 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 and administrative staff. It was also striking that the efficiency gains of hospitals converted to for-profit status were significantly lower in the diagnosis-related groups (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.We investigated the effects of privatization on hospital efficiency in Germany. To do so, we obtained boot-strapped data envelopment analysis (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 2.9 and 4.9%. 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 for the first three years after hospitals were converted to private non-profit status, but our estimations suggest that this effect was rather 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 and administrative staff. It was also striking that the efficiency gains of hospitals converted to for-profit status were significantly lower in the diagnosis-related groups (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.
Author	Schreyögg, Jonas Tiemann, Oliver
Author_xml	– sequence: 1 givenname: Oliver surname: Tiemann fullname: Tiemann, Oliver organization: Hamburg Center for Health Economics, University of Hamburg, Institute of Health Economics and Health Care Management, Helmholtz Zentrum München – sequence: 2 givenname: Jonas surname: Schreyögg fullname: Schreyögg, Jonas email: Jonas.Schreyoegg@wiso.uni-hamburg.de organization: Hamburg Center for Health Economics, University of Hamburg, Institute of Health Economics and Health Care Management, Helmholtz Zentrum München
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Keywords	Propensity score matching Hospitals Privatization Performance measurement Germany Data envelopment analysis
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PublicationDateYYYYMMDD	2012-12-01
PublicationDate_xml	– month: 12 year: 2012 text: 2012-12-01 day: 01
PublicationDecade	2010
PublicationPlace	Boston
PublicationPlace_xml	– name: Boston – name: Netherlands – name: New york
PublicationTitle	Health care management science
PublicationTitleAbbrev	Health Care Manag Sci
PublicationTitleAlternate	Health Care Manag Sci
PublicationYear	2012
Publisher	Springer US Springer Science + Business Media Springer Nature B.V
Publisher_xml	– name: Springer US – name: Springer Science + Business Media – name: Springer Nature B.V
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Snippet	We investigated the effects of privatization on hospital efficiency in Germany. To do so, we obtained bootstrapped data envelopment analysis (DEA) efficiency... We investigated the effects of privatization on hospital efficiency in Germany. To do so, we obtained boot-strapped data envelopment analysis (DEA) efficiency...
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SubjectTerms	Business and Management Conversion Data envelopment analysis Data-Envelopment-Analyse Deutschland Diagnosis-Related Groups Econometrics Efficiency Efficiency, Organizational - statistics & numerical data Effizienz Germany Health Administration Health economics Health Informatics Hospital Administration - statistics & numerical data Hospitals Humans Investigations Krankenhaus Management Market shares Nonprofit organizations Operations Research/Decision Theory Performance management Personnel Staffing and Scheduling - statistics & numerical data Privatisierung Privatization Privatization - organization & administration Privatization - statistics & numerical data Profit margins Propensity Score Regional government Regression Analysis Studies Time Factors Workforce planning
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Title	Changes in hospital efficiency after privatization
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