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OWNERSHIP AND FINANCIAL SUSTAINABILITY OF GERMAN ACUTE CARE HOSPITALS

Authors


KCE–Belgian Health Care Knowledge Centre, Door Building, Boulevard du Jardin Botanique 55, 1000 Brussels, Belgium. E-mail: christoph.schwierz@kce.fgov.be

SUMMARY

This paper considers the role of ownership form for the financial sustainability of German acute care hospitals over time. We measure financial sustainability by a hospital-specific yearly probability of default (PD) trying to mirror the ability of hospitals to survive in the market in the long run. The results show that private ownership is associated with significantly lower PDs than public ownership. Moreover, path dependence in the PD is substantial but far from 100%, indicating a large number of improvements and deteriorations in financial sustainability over time. Yet, the general public hospitals have the highest path dependence. Overall, this indicates that public hospitals, which are in a poor financial standing, remain in that state or even deteriorate over time, which may be conflicting with financial sustainability. Copyright © 2011 John Wiley & Sons, Ltd.

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