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Profit efficiency and ownership of German hospitals
Author(s) -
Herr Annika,
Schmitz Hendrik,
Augurzky Boris
Publication year - 2011
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.1622
Subject(s) - german , cost efficiency , stochastic frontier analysis , profit (economics) , business , economics , actuarial science , public economics , microeconomics , geography , archaeology , production (economics) , computer science , operating system
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.