Hospital ownership and efficiency: a review of studies with particular focus on Germany

Applications of data envelopment analysis in acute care hospitals: a systematic literature review, 1984-2022

This study reviews scholarly publications on data envelopment analysis (DEA) studies on acute care hospital (ACH) efficiency published between 1984 and 2022 in scholarly peer-reviewed journals. We employ systematic literature review (SLR) method to identify and analyze pertinent past research using predetermined steps. The SLR offers a comprehensive resource that meticulously analyzes DEA methodology for practitioners and researchers focusing on ACH efficiency measurement. The articles reviewed in the SLR are analyzed and synthesized based on the nature of the DEA modelling process and the key findings from the DEA models. The key findings from the DEA models are presented under the following sections: effects of different ownership structures; impacts of specific healthcare reforms or other policy interventions; international and multi-state comparisons; effects of changes in competitive environment; impacts of new technology implementations; effects of hospital location; impacts of quality management interventions; impact of COVID-19 on hospital performance; impact of teaching status, and impact of merger. Furthermore, the nature of DEA modelling process focuses on use of sensitivity analysis; choice of inputs and outputs; comparison with Stochastic Frontier Analysis; use of congestion analysis; use of bootstrapping; imposition of weight restrictions; use of DEA window analysis; and exogenous factors. The findings demonstrate that, despite several innovative DEA extensions and hospital applications, over half of the research used the conventional DEA models. The findings also show that the most often used inputs in the DEA models were labor-oriented inputs and hospital beds, whereas the most frequently used outputs were outpatient visits, followed by surgeries, admissions, and inpatient days. Further research on the impact of healthcare reforms and health information technology (HIT) on hospital performance is required, given the number of reforms being implemented in many countries and the role HIT plays in enhancing care quality and lowering costs. We conclude by offering several new research directions for future studies.

Association between hospital ownership and patient selection, management, and outcomes after carotid endarterectomy or carotid artery stenting : - Secondary data analysis of the Bavarian statutory quality assurance database

BACKGROUND

This study analyses the association between hospital ownership and patient selection, treatment, and outcome of carotid endarterectomy (CEA) or carotid artery stenting (CAS).

METHODS

The analysis is based on the Bavarian subset of the nationwide German statutory quality assurance database. All patients receiving CEA or CAS for carotid artery stenosis between 2014 and 2018 were included. Hospitals were subdivided into four groups: university hospitals, public hospitals, hospitals owned by charitable organizations, and private hospitals. The primary outcome was any stroke or death until discharge from hospital. Research was funded by Germany's Federal Joint Committee Innovation Fund (01VSF19016 ISAR-IQ).

RESULTS

In total, 22,446 patients were included. The majority of patients were treated in public hospitals (62%), followed by private hospitals (17%), university hospitals (16%), and hospitals under charitable ownership (6%). Two thirds of patients were male (68%), and the median age was 72 years. CAS was most often applied in university hospitals (25%) and most rarely used in private hospitals (9%). Compared to university hospitals, patients in private hospitals were more likely asymptomatic (65% vs. 49%). In asymptomatic patients, the risk of stroke or death was 1.3% in university hospitals, 1.5% in public hospitals, 1.0% in hospitals of charitable owners, and 1.2% in private hospitals. In symptomatic patients, these figures were 3.0%, 2.5%, 3.4%, and 1.2% respectively. Univariate analysis revealed no statistically significant differences between hospital groups. In the multivariable analysis, compared to university hospitals, the odds ratio of stroke or death in asymptomatic patients treated by CEA was significantly lower in charitable hospitals (OR 0.19 [95%-CI 0.07-0.56, p = 0.002]) and private hospitals (OR 0.47 [95%-CI 0.23-0.98, p = 0.043]). In symptomatic patients (elective treatment, CEA), patients treated in private or public hospitals showed a significantly lower odds ratio compared to university hospitals (0.36 [95%-CI 0.17-0.72, p = 0.004] and 0.65 [95%-CI 0.42-1.00, p = 0.048], respectively).

CONCLUSIONS

Hospital ownership was related to patient selection and treatment, but not generally to outcomes. The lower risk of stroke or death in the subgroup of electively treated patients in private hospitals might be due to the right timing, the choice of treatment modality or actually to better structural and process quality.

Public and Private Options in Practice: The Military Health System

Recent debates over health care reform, including in the context of the Military Health System (MHS) and Veterans Administration, highlight the dispute between public and private provision of health care services. Using novel data on childbirth claims from the MHS and drawing on the combination of plausibly exogenous patient moves and heterogeneity across bases in the availability of base hospitals, we identify the impact of receiving obstetrical care on versus off military bases. We find evidence that off-base care is associated with slightly greater resource intensity, but also notably better outcomes, suggesting marginal efficiency gains from care privatization.

Improving the technical efficiency of public health centers in Cambodia: a two-stage data envelopment analysis

BACKGROUND

Cambodia is undergoing a series of reforms with the objective of reaching universal health coverage. Information on the causes of inefficiencies in health facilities could pave the way for a better utilization of limited resources available to ensure the best possible health care for the population.

OBJECTIVES

The purpose of this study is to evaluate the technical efficiency of health centers and the determinants for inefficiencies.

METHODS

This cross-sectional study used secondary data from a costing study on 43 health centers in six Cambodian provinces (2016-2017). Firstly, the Data Envelopment Analysis method with output-orientation was applied to calculate efficiency scores by selecting multiple input and output variables. Secondly, a tobit regression was performed to analyze potential explanatory variables that could influence the inefficiency of health centers.

RESULTS

Study findings showed that 18 (43%) health centers were operating inefficiently with reference to the variable returns to scale efficiency frontier and had a mean pure technical efficiency score of 0.87. Overall, 22 (51%) revealed deficits in producing outputs at an optimal scale size. Distance to the next referral hospital, size and quality performance of the health centers were significantly correlated with health center inefficiencies.

CONCLUSION

Differences in efficiency exist among health centers in Cambodia. Inefficient health centers can improve their technical efficiency by increasing the utilization and quality of health services, even if it involves higher costs. Technical efficiency should be continuously monitored to observe changes in health center performance over time.

Selecting the most suitable organizational structure for hospitals: an integrated fuzzy FUCOM-MARCOS method

Background

Previous studies mentioned four organizational structures for hospitals, which are budgetary, autonomous, corporate, and private. Nevertheless, healthcare decision-makers are still required to select the most organizational structure specific to their circumstances. The present study aims to provide a framework to prioritize and select the most suitable organizational structure using multicriteria decision-making (MCDM) methods in Iranian hospitals.

Methods

First, a multicriteria decision-making model consisted of the respective criteria, and alternatives were developed. The pertinent criteria were identified through a systematic literature review. The coefficient weights of the identified criteria were then calculated using FUCOM-F. Finally, organizational structures were prioritized in accordance with the identified criteria using FMARCOS.

Results

The findings reveal that income is the most significant criterion in selecting organizational structures for hospitals whereas the number of outpatient visits is the least important. Also, the private structure is the most appropriate, and budgetary style is the least suitable organizational structure for Iranian hospitals.

Conclusion

Providing a framework in order to select the most appropriate organizational structure could help managers and policymakers of the healthcare sector in Iran and other countries, mainly similar developing countries.

Homogeneity and Best Practice Analyses in Hospital Performance Management: An Analytical Framework

Performance modeling of hospitals using data envelopment analysis (DEA) has received steadily increasing attention in the literature. As part of the traditional DEA framework, hospitals are generally assumed to be functionally similar and therefore homogenous. Accordingly, any identified inefficiency is supposedly due to the inefficient use of inputs to produce outputs. However, the disparities in DEA efficiency scores may be a result of the inherent heterogeneity of hospitals. Additionally, traditional DEA models lack predictive capabilities despite having been frequently used as a benchmarking tool in the literature. To address these concerns, this study proposes a framework for analyzing hospital performance by combining two complementary modeling approaches. Specifically, we employ a self-organizing map artificial neural network (SOM-ANN) to conduct a cluster analysis and a multilayer perceptron ANN (MLP-ANN) to perform a heterogeneity analysis and a best practice analysis. The applicability of the integrated framework is empirically shown by an implementation to a large dataset containing more than 1,100 hospitals in Germany. The framework enables a decision-maker not only to predict the best performance but also to explore whether the differences in relative efficiency scores are ascribable to the heterogeneity of hospitals.

Countries' experiences in reforming hospital administration structure based on the Parker and Harding model: A systematic review study

In recent years, many reforms have been made on the structure of hospital administration, most of which are proposed by Parker-Harding models. Therefore, the purpose of this study is to systematically review global relevant experiences in reforming the hospital governance structure with emphasis on the Parker-Harding model. Required information was collected using keywords autonomization, corporatization, privatization, decentralization, reform, hospital autonomy, governance model, and structural reform in databases such as EMBASE, PubMed, Scopus, SID, MagIran, and other resources. Information on the subjects under study was collected from 1990 to 2020. The content extraction method was used for data extraction and data analysis. Thirty-nine sources were included in the study. Results of searching for relevant evidence on a variety of hospital governance models (government, board, corporate, and private) based on the Parker-Harding model in four categories including strengths (31), weaknesses (30), outcomes (26), and interventions (21) are outlined. In this study, strengths, weaknesses, outcomes, and corrective interventions were presented for different models of hospital administration that could be used by healthcare policymakers. Also, According to the results of this study, governmental model less recommended.

Factors that Determine Comprehensive Categorical Classification of EHR Implementation Levels

Electronic Health Records (EHRs) have the potential to alleviate patient safety mistakes. Of the various levels of EHR, advanced or higher-level functionalities of EHR are designed to improve patient safety. Certain organizational and environmental factors may pose as barriers toward implementing all of the functionalities, leaving certain hospitals intermediate between basic and comprehensive levels of implementation. This study identifies a comprehensive categorical classification that includes hospitals that have functionalities between basic and comprehensive levels of EHR and determines the organizational and environmental factors that may influence hospitals to implement one or more combinations of these categories. A longitudinal panel design was used. Ordinal logistic regression with random effects model was fitted with robust cluster standard errors. Our sample consisted of non-federal general acute care hospitals utilizing a panel design from 2010 to 2016 with 17 586 hospital-year observations (or an average of 2600 hospitals per year). Larger size hospitals, ones with higher total margin, metropolitan and urban hospitals, system affiliated hospitals, and those in higher managed care penetration areas have higher odds of belonging in one of the higher categories of EHR implementation. Hospitals that can access a greater amount of human resources and financial assets from their environments, may implement higher levels of EHR. Initial and maintenance costs of EHR, interoperability issues, and inability to distribute high costs of training across facilities may stymie implementation of higher EHR functionalities. Policymaking to encourage competition among vendors may possibly lower the implementation price for hospitals with limited resources.

Patients' perceptions of quality in Swedish primary care - a study of differences between private and public ownership

Purpose

The purpose of the paper is to describe and analyze differences in patients' quality perceptions of private and public primary care centers in Sweden.

Design/methodology/approach

The article explores the differences in quality perceptions between patients of public and private primary care centers based on data from a large patient survey in Sweden. The survey covers seven dimensions, and in this paper the measure Overall impression was used for the comparison. With more than 80,000 valid responses, the survey covers all primary care centers in Sweden which allowed for a detailed analysis of differences in quality perceptions among patients from the different categories of owners.

Findings

The article contributes with a detailed description of different types of private owners: not-for-profit and for profit, as well as corporate groups and independent care centers. The results show a higher quality perception for independent centers compared to both public and corporate groups.

Research limitations/implications

The small number of not-for-profit centers (21 out of 1,117 centers) does not allow for clear conclusions for this group. The results, however, indicate an even higher patient quality perception for not-for-profit centers. The study focus on describing differences in quality perceptions between the owner categories. Future research can contribute with explanations to why independent care centers receive higher patient satisfaction.

Social implications

The results from the study have policy implications both in a Swedish as well as international perspective. The differentiation between different types of private owners made in this paper opens up for interesting discussions on privatization of healthcare and how it affects patient satisfaction.

Originality/value

The main contribution of the paper is the detailed comparison of different categories of private owners and the public owners.

For-Profit Hospitals Have Thrived Because of Generous Public Reimbursement Schemes, Not Greater Efficiency: A Multi-Country Case Study

For-profit hospitals' market share has increased in many nations over recent decades. Previous studies suggest that their growth is not attributable to superior performance on access, quality of care, or efficiency. We analyzed other factors that we hypothesized may contribute to the increasing role of for-profit hospitals. We studied the historical development of the for-profit hospital sector across 4 nations with contrasting trends in for-profit hospital market share: the United States, the United Kingdom, Germany, and the Netherlands. We focused on 3 factors that we believed might help explain why the role of for-profits grew in some nations but not in others: (1) the treatment of for-profits by public reimbursement plans, (2) physicians' financial interests, and (3) the effect of the political environment. We conclude that access to subsidies and reimbursement under favorable terms from public health care payors is an important factor in the rise of for-profit hospitals. Arrangements that aligned financial incentives of physicians with the interests of for-profit hospitals were important in stimulating for-profit growth in an earlier era, but they play little role at present. Remarkably, the environment for for-profit ownership seems to have been largely immune to political shifts.

[Constructing a new institutional hegemony in the health field]

This article argues for the construction of a new institutional hegemony with a rhizomatic design based on health centers with direct relations to a network of hospitals with increasing levels of complexity, which are put at the service of these health centers and not the other way around. The proposal for these centers includes community-based teams of workers carrying out humanized practice centered on the shift from health services to care within the community, respecting the particularities and idiosyncrasies of its residents and their cultures. First, a brief historical revision of the genesis of health centers and of hospitals is presented. Second, technical recommendations to restructure models of care and institutional organization in the health field are put forth, and technical-political proposals for this new institutional hegemony are outlined, which are developed along three dimensions: organization, policy, and service and care processes. Lastly, some barriers to the construction of this new hegemony are identified.

The reimbursement of new medical technologies in German inpatient care: What factors explain which hospitals receive innovation payments?

Most hospital payment systems based on diagnosis-related groups (DRGs) provide payments for newly approved technologies. In Germany, they are negotiated between individual hospitals and health insurances. The aim of our study is to assess the functioning of temporary reimbursement mechanisms. We used multilevel logistic regression to examine factors at the hospital and state levels that are associated with agreeing innovation payments. Dependent variable was whether or not a hospital had successfully negotiated innovation payments in 2013 (n = 1532). Using agreement data of the yearly budget negotiations between each German hospital and representatives of the health insurances, the study comprises all German acute hospitals and innovation payments on all diagnoses. In total, 32.9% of the hospitals successfully negotiated innovation payments in 2013. We found that the chance of receiving innovation payments increased if the hospital was located in areas with a high degree of competition and if they were large, had university status and were private for-profit entities. Our study shows an implicit self-controlled selection of hospitals receiving innovation payments. While implicitly encouraging safety of patient care, policy makers should favour a more direct and transparent process of distributing innovation payments in prospective payment systems.

Sustainable efficiency assessment of private diagnostic laboratories under uncertainty

Purpose

Assessing the performance of medical laboratories plays an important role in the quality of health services. However, because of imprecise data, reliable results from laboratory performance cannot be obtained easily. The purpose of this paper is to illustrate the use of interval network data envelopment analysis (INDEA) based on sustainable development indicators under uncertainty.

Design/methodology/approach

In this study, each medical diagnostic laboratory is considered as a decision-making unit (DMU) and an INDEA model is used for calculating the efficiency of each medical diagnostic laboratory under imprecise inputs and outputs. The proposed model helps provide managers with effective performance scores for deficiencies and business improvements. The proposed model with realistic efficiency scores can help administrators manage their deficiencies and ultimately improve their business.

Findings

The results indicate that uncertainty can lead to changes in performance scores, rankings and performance classifications. Therefore, the use of DEA models under certainty can be potentially misleading.

Originality/value

The contribution of this study provides useful insights into the use of INDEA as a modeling tool to aid managerial decision-making in assessing efficiency of medical diagnostic laboratories based on sustainable development indicators under uncertainty.

Is there scope for mixed markets in the provision of hospital care?

Market oriented reforms in hospital care have produced a variety of quasi markets that differ for the type of providers that are allowed to compete. Mixed markets, where public hospitals compete alongside private ones, are increasingly common, but the literature does not agree on their performances and their desirability. We review the contributions in this field by proposing a common framework which allows to account for the different approaches proposed to model public hospitals. In this paper we show under which conditions mixed markets perform better in terms of average quality, and we review the empirical literature to determine whether these conditions are met. In general, pure forms (private or public competition) are superior to mixed markets, unless patients interpret public hospitals as reference suppliers, and quality of care is important. The empirical evidence on these key questions shows that public hospitals behave differently from private organisations, but they are not necessarily less efficient. Research into patients choices seems to suggest that ownership is a value, but the empirical literature is still rather scant. From a policy point of view, our review suggests that there does not seem to be a clear answer to whether this market form should be used. Local conditions are going to play an important role.

Technical Efficiency of Public and Private Hospitals in Beijing, China: A Comparative Study

Objective: With the participation of private hospitals in the health system, improving hospital efficiency becomes more important. This study aimed to evaluate the technical efficiency of public and private hospitals in Beijing, China, and analyze the influencing factors of hospitals’ technical efficiency, and thus provide policy implications to improve the efficiency of public and private hospitals. Method: This study used a data set of 154–232 hospitals from “Beijing’s Health and Family Planning Statistical Yearbooks” in 2012–2017. The data envelopment analysis (DEA) model was employed to measure technical efficiency. The propensity score matching (PSM) method was used for matching “post-randomization” to directly compare the efficiency of public and private hospitals, and the Tobit regression was conducted to analyze the influencing factors of technical efficiency in public and private hospitals. Results: The technical efficiency, pure technical efficiency and scale efficiency of public hospitals were higher than those of private hospitals during 2012–2017. After matching propensity scores, although the scale efficiency of public hospitals remained higher than that of their private counterparts, the pure technical efficiency of public hospitals was lower than that of private hospitals. Panel Tobit regression indicated that many hospital characteristics such as service type, level, and governance body affected public hospitals’ efficiency, while only the geographical location had an impact on private hospitals’ efficiency. For public hospitals in Beijing, those with lower average outpatient and inpatient costs per capita had better performance in technical efficiency, and bed occupancy rate, annual visits per doctor, and the ratio of doctors to nurses also showed a positive sign with technical efficiency. For private hospitals, the average length of stay was negatively associated with technical efficiency, but the bed occupancy rate, annual visits per doctor, and average outpatient cost were positively associated with technical efficiency. Conclusions: To improve technical efficiency, public hospitals should focus on improving the management standards, including the rational structure of doctors and nurses as well as appropriate reduction of hospitalization expenses. Private hospitals should expand their scale with proper restructuring, mergers, and acquisitions, and pay special attention to shortening the average length of stay and increasing the bed occupancy rate.

Efficiency of acute public hospitals in the region of Murcia, Spain

Aim: To evaluate the level of efficiency of public acute hospitals situated in the region of Murcia (Spain). Materials & methods: Data from nine acute general hospitals of Murcia's Health Service (SMS by its Spanish acronym) were analyzed over the 2012-2014 period. The data were extracted from the In-patient Health Establishment Statistics of the Ministry of Health, Social Services and Equality, from the National Health Service (SNS) portal and the SMS portal. To this end, the data envelopment analysis (DEA)-window method was used, since this extension of the basic DEA model allows to compare the efficiency of a small number of units over different years and analyze changes in efficiency over time. In addition, the model was complemented by smooth bootstrapping and a superefficiency analysis to improve the quality of the data interpretation. Four inputs were used (number of beds, number of operating rooms, personnel costs and operating costs), two undesirable outputs (average stay and rate of return) and three desirable outputs (weighted discharges, emergencies and surgical interventions). Results: The average level of inefficiency was 1.58% over the study period, with a good evolution between 2012 (3.53%) and 2014 (0.20%). This improvement was also reflected in the number of efficient hospitals that rose from two in 2012 to eight in 2014. Moreover, the slack levels detected were small. Conclusion: The management of the public hospitals analyzed was favorable, both regarding average level of efficiency and the number of hospitals qualified as efficient. However, the analysis revealed several ways to increase efficiency by reducing specific inputs and nondesirable outputs (mainly operating and personnel costs as well as average length of stay) while increasing desirable outputs (mostly the number of surgical interventions). To finish, specific policy measures are suggested to improve the performance of these hospitals.

A comparative performance analysis of a renowned public private partnership for health care provision in Spain between 2003 and 2015

BACKGROUND

Recently, the once archetype of the public private partnership (PPP) in the Spanish National Health System (SNHS), namely the Alzira's Model, has come to an end. Advocates defended the superiority of PPPs over public-tenured provision, in terms of quality and technical efficiency. This paper profiles and compares Alzira's life-cycle performance with similar public-tenured providers.

METHODS

Observational study on secondary data from virtually all hospital care episodes produced in 51 integrated providers (i.e., administrative healthcare areas) and 67 hospitals, in 2003 and 2015. Alzira's 2015 performance (and its variation since 2003) was compared with all public-tenured peers in the SNHS, using 26 indicators analysing the differences in age-sex standardized rates of events or risk-adjusted mortality, severity-adjusted hospital expenditure and hospital technical efficiency.

RESULTS

In comparison with the corresponding public-tenured peers, Alzira's 2015 performance was statistically worse than the benchmark in the majority of indicators (15 out of 26); yet, its performance was one of the best in the SNHS in adjusted-mortality after Percutaneous Coronary Intervention (PCI). Over time, Alzira showed a statistically greater 2003-2015 improvement than its peers' average in eleven of the indicators, and a lower improvement in nine.

CONCLUSIONS

In this comprehensive comparative study on Alzira's performance, this PPP has not generally outperformed public-tenured providers, although in some areas of care its developments have been outstanding.

Sources of health financing and health outcomes: A panel data analysis

We study the differential impacts of public and private sources of health spending on health outcomes using a triple difference approach. We find that private health spending has on average a higher health-promoting effect than public health spending. This result is robust with respect to the choice of outcome measure and covariates in the regression and driven primarily by the countries with ineffective governments. Once we restrict our sample to countries with effective governments, private health spending is found to be no better than public health spending in improving the health outcome.

The Choice of Transcatheter Aortic Valve Implementation (TAVI): Do Patient Co-morbidity and Hospital Ownership Type Matter?

BACKGROUND

Innovative technologies challenge healthcare systems, as evidence on costs and benefits frequently usually are slow to reflect new technology. We investigated these dynamics for Germany, using the emergence of transcatheter aortic valve implementation (TAVI) as an alternative to conventional aortic valve replacements (CAVR).

OBJECTIVE

We focused on the role of patient co-morbidity-which would be a medical explanation for adopting TAVI-and hospital ownership status, hypothesizing that for-profit facilities are more likely to capitalize on the favorable reimbursement conditions of TAVI.

METHODS

The analysis uses claims data from the Techniker Krankenkasse, the largest health insurance fund in Germany, for the years 2009-2015, covering 2892 patients with TAVI and 9523 with CAVR. The decision on TAVI versus CAVR was estimated for patient-level data, that is, socioeconomic data as well as co-morbidity. At the hospital level, we included the ownership type. We also controlled for effects of the respective owner (rather than the type of ownership), including a random intercept.

RESULTS

While the co-morbidity score of TAVI patients was much higher in the early years, over time, the score almost converged with that of CAVR patients. This is in agreement with emerging evidence that suggests the use of TAVI also leads to better patient outcomes. Our results indicate that the type of ownership does not drive the switch to TAVI. We found little, if any, effect from the respective owner, regardless of ownership type.

CONCLUSION

Overall, the effects of co-morbidity suggest that providers acted responsibly when adopting TAVI while evidence was still emerging.

Cultural orientations and information systems success in public and private hostitals: preliminary evidences from Italy

Background

The effective adoption and use of digital and computerized systems and records in hospitals are crucial for increasing the overall quality, safety and outcomes of any national health community. Prior research found that hospitals’ dominant cultural orientation affects the adoption of new technology. However, the organizational culture of hospitals can greatly vary between public and private hospitals. Thus, the ownership type of the hospital is likely to affect, to some extent, the aforementioned relationship between culture and information system success. The present article focuses in detail on this issue and attempts to answer the following research question: which cultural orientations are promoting information system success in public and private hospitals?

Methods

The authors develop and test two hypotheses about this relationship via two regression approaches (single-level and multi-level). The authors collected data from 172 respondents—clinicians and non-clinicians—working in two (one public and one private) hospitals in Campania, one of the largest regions in Italy.

Results

The findings of this study show clear differences between private and public hospitals. First, a dominant cultural orientation that emphasizes flexibility values (clan and adhocracy cultures) positively influences information systems success in terms of individual impact. Second, the influence of a clan orientation on individual impact is stronger in the public hospital. Third, the influence of an adhocracy orientation is stronger in the private hospital. Overall, the type of ownership—either public or private—of these healthcare organizations affects the link between cultural orientations and IS success.

Conclusion

Managers of private hospitals should offer to their employees the opportunity to adopt and implement new information systems processes driven by openness towards the external environment in order to benchmark and learn from what was done previously in other organizations. Managers of public hospitals should set up human resource management practices, knowledge creation mechanisms, and internal communication capable of generating a friendly learning environment for their employees when adopting new technology.

Do private hospitals outperform public hospitals regarding efficiency, accessibility, and quality of care in the European Union? A literature review

European countries have enhanced the scope of private provision within their health care systems. Privatizing services have been suggested as a means to improve access, quality, and efficiency in health care. This raises questions about the relative performance of private hospitals compared with public hospitals. Most systematic reviews that scrutinize the performance of the private hospitals originate from the United States. A systematic overview for Europe is nonexisting. We fill this gap with a systematic realist review comparing the performance of public hospitals to private hospitals on efficiency, accessibility, and quality of care in the European Union. This review synthesizes evidence from Italy, Germany, the United Kingdom, France, Greece, Austria, Spain, and Portugal. Most evidence suggests that public hospitals are at least as efficient as or are more efficient than private hospitals. Accessibility to broader populations is often a matter of concern in private provision: Patients with higher social-economic backgrounds hold better access to private hospital provision, especially in private parallel systems such as the United Kingdom and Greece. The existing evidence on quality of care is often too diverse to make a conclusive statement. In conclusion, the growth in private hospital provision seems not related to improvements in performance in Europe. Our evidence further suggests that the private (for-profit) hospital sector seems to react more strongly to (financial) incentives than other provider types. In such cases, policymakers either should very carefully develop adequate incentive structures or be hesitant to accommodate the growth of the private hospital sector.

Comparing public and private providers: a scoping review of hospital services in Europe

BACKGROUND

What is common to many healthcare systems is a discussion about the optimal balance between public and private provision. This paper provides a scoping review of research comparing the performance of public and private hospitals in Europe. The purpose is to summarize and compare research findings and to generate questions for further studies.

METHODS

The review was based on a methodological approach inspired by the British EPPI-Centre's methodology. This review was broader than review methodologies used by Cochrane and Campbell and included a wider range of methodological designs. The literature search was performed using PubMed, EconLit and Web of Science databases. The search was limited to papers published from 2006 to 2016. The initial searches resulted in 480 studies. The final sample was 24 papers. Of those, 17 discussed economic effects, and seven studies addressed quality.

RESULTS

Our review of the 17 studies representing more than 5500 hospitals across Europe showed that public hospitals are most frequently reported as having the best economic performance compared to private not-for-profit (PNFP) and private for-profit (PFP) hospitals. PNFP hospitals are second, while PFP hospitals are least frequently reported as superior. However, a sizeable number of studies did not find significant differences. In terms of quality, the results are mixed, and it is not possible to draw clear conclusions about the superiority of an ownership type. A few studies analyzed patient selection. They indicated that public hospitals tend to treat patients who are slightly older and have lower socioeconomic status, riskier lifestyles and higher levels of co-morbidity and complications than patients treated in private hospitals.

CONCLUSIONS

The paper points to shortcomings in the available studies and argues that future studies are needed to investigate the relationship between contextual circumstances and performance. A big weakness in many studies addressing economic effects is the failure to control for quality and other operational dimensions, which may have influenced the results. This weakness should also be addressed in future comparative studies.

Assessing the effect of standardized cost systems on financial performance. A difference-in-differences approach for hospitals according to their technological level

Promoting the improvement of standardized cost systems (CS) is one of the measures available to health policy makers for the purpose of improving efficiency in hospitals over the long-term. Nevertheless, very few studies evaluate the relationship between alternative CS and the costs really incurred. We use data from 242 hospitals of the Spanish National Health Service (NHS) between 2010 and 2013 in order to explore the determinants of the cost per adjusted patient day, using a difference-in-differences approach where the treatment is the implementation of an advanced CS. We also investigate if the association between advanced CS and unit cost is different depending upon the technological level of the hospital. Results show that hospitals with more advanced CS contained their costs better. However, the latter effect of advanced CS is lower in hospitals with a greater endowment of high technology. Results suggest that health authorities should support the development of CS, particularly in high-tech hospitals, which are usually larger and more complex hospitals that tend to accumulate a greater portion of NHS hospital sector expenditure.

Hospital Policy and Productivity - Evidence from German States

Total factor productivity (TFP) growth allows for additional healthcare services under restricted resources. We examine whether hospital policy can stimulate hospital TFP growth. We exploit variation across German federal states in the period 1993-2013. State governments decide on hospital capacity planning (number of hospitals, departments, and beds), ownership, medical students, and hospital investment funding. We show that TFP growth in German hospital care reflects quality improvements rather than increases in output volumes. Second-stage regression results indicate that reducing the length of stay is generally a proper way to foster TFP growth. The effects of other hospital policies depend on the reimbursement scheme: Under activity-based (German Diagnosis-related Group) hospital funding, scope-related policies (privatization and specialization) come with TFP growth. Under fixed daily rate funding, scale matters to TFP (hospital size and occupancy rates). Differences in capitalization in East and West Germany allow to show that deepening capital may enhance TFP growth if capital is scarce. We also show that there is less scope for hospital policies after large-scale restructurings of the hospital sector. Copyright © 2016 John Wiley & Sons, Ltd.

Determinants of transient and persistent hospital efficiency: The case of Italy

In this paper, we extend the 4-random-component closed skew-normal stochastic frontier model by including exogenous determinants of hospital persistent (long-run) and transient (short-run) inefficiency, separated from unobserved heterogeneity. We apply this new model to a dataset composed by 133 Italian hospitals during the period 2008-2013. We show that average total inefficiency is about 23%, higher than previous estimates; hence, a model where the different types of inefficiency and hospital unobserved characteristics are not confounded allows us to get less biased estimates of hospital inefficiency. Moreover, we find that transient efficiency is more important than persistent efficiency, as it accounts for 60% of the total one. Last, we find that ownership (for-profit hospitals are more transiently inefficient and less persistently inefficient than not-for-profit ones, whereas public hospitals are less transiently inefficient than not-for-profit ones), specialization (specialized hospitals are more transiently inefficient than general ones; i.e., there is evidence of scope economies in short-run efficiency), and size (large-sized hospitals are better than medium and small ones in terms of transient inefficiency) are determinants of both types of inefficiency, although we do not find any statistically significant effect of multihospital systems and teaching hospitals.

Improving health care costing with resource consumption accounting

Purpose - The purpose of this paper is to explore the differences between a traditional costing system (TCS) and resource consumption accounting (RCA) based on a case study carried out in a hospital. Design/methodology/approach - A descriptive case study was first carried out to identify the current costing system of the case hospital. An exploratory case study was then conducted to reveal how implementing RCA within the case hospital assigns costs differently to gallbladder surgeries than the current costing system (i.e. a TCS). Findings - The study showed that, in contrast to a TCS, RCA considers the unused capacity, which is the difference between the work that can be performed based on current resources and the work that is actually being performed. Therefore, it assigns lower total costs to open and laparoscopic gallbladder surgeries. The study also showed that by separating costs into fixed and variable RCA allows managers to benefit from a pricing strategy based on the difference between the service's selling price and variable costs incurred in providing that service. Research limitations/implications - The limitation of this study is that, because of time constraints, the implementation was performed in the general surgery department only. However, since RCA is an advanced system that has the same application procedures for any department inside in a hospital, managers need only time gaps to implement this system to all parts of the hospital. Practical implications - This study concluded that RCA is better than a TCS for use in health care settings that have high overhead costs because it accurately assigns overhead costs to services by considering unused capacities incurred by a hospital. Consequently, this study provides insight into both measuring and managing unused capacities within the health care sector. This study also concluded that RCA helps health care administrators increase their competitive advantage by allowing them to determine the lowest service price. Originality/value - Since the literature review found no study comparing RCA with TCS in a real-life health care setting, little is known about differences arising from applying these systems in this context. Thus, the current study fills this gap in the literature by comparing RCA with TCS for both open and laparoscopic gallbladder surgeries.

Factors affecting the technical efficiency of general hospitals in Iran: data envelopment analysis

BACKGROUND

Restrictions on resource accessibility and its optimal application is the main challenge in organizations nowadays. The aim of this research was to study the technical efficiency and its related factors in Tehran general hospitals.

MATERIALS AND METHODS

This descriptive analytical study was conducted retrospectively in 2014. Fifty-four hospitals with private, university, and social security ownerships from the total 110 general hospitals were randomly selected for inclusion into this study on the basis of the share of ownership. Data were collected using a checklist with three sections, including background variables, inputs, and outputs.

RESULTS

Seventeen (31.48%) hospitals had an efficiency score of 1 (highest efficiency score). The highest average efficiency score was in social security hospitals (84.32). Private and university hospitals ranked next with an average of 84.29 and 79.64, respectively. Analytical results showed that there was a significant relationship between hospital ownership, hospital type in terms of duty and specialization, educational field of the chief executive officer, and technical efficiency. There was no significant relationship between education level of hospital manager and technical efficiency.

CONCLUSION AND RECOMMENDATIONS

Most of the studied hospitals were operating at low efficiency. Therefore, policymakers should plan to improve the hospital operations and promote hospitals to an optimal level of efficiency.

Does integration of HIV and sexual and reproductive health services improve technical efficiency in Kenya and Swaziland? An application of a two-stage semi parametric approach incorporating quality measures

Theoretically, integration of vertically organized services is seen as an important approach to improving the efficiency of health service delivery. However, there is a dearth of evidence on the effect of integration on the technical efficiency of health service delivery. Furthermore, where technical efficiency has been assessed, there have been few attempts to incorporate quality measures within efficiency measurement models particularly in sub-Saharan African settings. This paper investigates the technical efficiency and the determinants of technical efficiency of integrated HIV and sexual and reproductive health (SRH) services using data collected from 40 health facilities in Kenya and Swaziland for 2008/2009 and 2010/2011. Incorporating a measure of quality, we estimate the technical efficiency of health facilities and explore the effect of integration and other environmental factors on technical efficiency using a two-stage semi-parametric double bootstrap approach. The empirical results reveal a high degree of inefficiency in the health facilities studied. The mean bias corrected technical efficiency scores taking quality into consideration varied between 22% and 65% depending on the data envelopment analysis (DEA) model specification. The number of additional HIV services in the maternal and child health unit, public ownership and facility type, have a positive and significant effect on technical efficiency. However, number of additional HIV and STI services provided in the same clinical room, proportion of clinical staff to overall staff, proportion of HIV services provided, and rural location had a negative and significant effect on technical efficiency. The low estimates of technical efficiency and mixed effects of the measures of integration on efficiency challenge the notion that integration of HIV and SRH services may substantially improve the technical efficiency of health facilities. The analysis of quality and efficiency as separate dimensions of performance suggest that efficiency may be achieved without sacrificing quality.

Mortality, length of stay, and inpatient charges for heart failure patients at public versus private hospitals in South Korea

PURPOSE

This study compared in-hospital mortality within 30 days of admission, lengths of stay, and inpatient charges among patients with heart failure admitted to public and private hospitals in South Korea.

MATERIALS AND METHODS

We obtained health insurance claims data for all heart failure inpatients nationwide between November 1, 2011 and May 31, 2012. These data were then matched with hospital-level data, and multi-level regression models were examined. A total of 8406 patients from 253 hospitals, including 31 public hospitals, were analyzed.

RESULTS

The in-hospital mortality rate within 30 days of admission was 0.92% greater and the mean length of stay was 1.94 days longer at public hospitals than at private hospitals (mortality: 5.18% and 4.26%, respectively; LOS: 12.08 and 10.14 days, respectively). The inpatient charges were 11.4% lower per case and 24.5% lower per day at public hospitals than at private hospitals. After adjusting for patient- and hospital-level confounders, public hospitals had a 1.62-fold higher in-hospital mortality rate, a 16.5% longer length of stay, and an 11.7% higher inpatient charge per case than private hospitals, although the charges of private hospitals were greater in univariate analysis.

CONCLUSION

We recommend that government agencies and policy makers continue to monitor quality of care, lengths of stay in the hospital, and expenditures according to type of hospital ownership to improve healthcare outcomes and reduce spending.

NHS commissioning practice and health system governance: a mixed-methods realistic evaluation

Background

By 2010 English health policy-makers had concluded that the main NHS commissioners [primary care trusts (PCTs)] did not sufficiently control provider costs and performance. After the 2010 general election, they decided to replace PCTs with general practitioner (GP)-controlled Clinical Commissioning Groups (CCGs). Health-care commissioners have six main media of power for exercising control over providers, which can be used in different combinations (‘modes of commissioning’).

Objectives

To: elicit the programme theory of NHS commissioning policy and empirically test its assumptions; explain what shaped NHS commissioning structures; examine how far current commissioning practice allowed commissioners to exercise governance over providers; examine how commissioning practices differ in different types of commissioning organisation and for specific care groups; and explain what factors influenced commissioning practice and the relationships between commissioners and providers.

Design

Mixed-methods realistic evaluation, comprising: Leximancer and cognitive frame analyses of policy statements to elicit the programme theory of NHS commissioning policy; exploratory cross-sectional analysis of publicly available managerial data about PCTs; systematic comparison of case studies of commissioning in four English sites – including commissioning for older people at risk of unplanned hospital admission; mental health; public health; and planned orthopaedic surgery – and of English NHS commissioning practice with that of a German sick-fund and an Italian region (Lombardy); action learning sets, to validate the findings and draw out practical implications; and two framework analyses synthesising the findings and testing the programme theory empirically.

Results

In the four English case study sites, CCGs were formed by recycling former commissioning structures, relying on and maintaining the existing GP commissioning leaderships. The stability of distributed commissioning depended on the convergence of commissioners’ interests. Joint NHS and local government commissioning was more co-ordinated at strategic than operational level. NHS providers’ responsiveness to commissioners reflected how far their interests converged, but also providers’ own internal ability to implement agreements. Commissioning for mental health services and to prevent recurrent unplanned hospital readmissions relied more on local ‘micro-commissioning’ (collaborative care pathway design) than on competition. Service commissioning was irrelevant to intersectoral health promotion, but not clinical prevention work. On balance, the possibility of competition did not affect service outcomes in the ways that English NHS commissioning policies assumed. ‘Commodified’ planned orthopaedic surgery most lent itself to provider competition. In all three countries, tariff payments increased provider activity and commissioners’ costs. To contain costs, commissioners bundled tariff payments into blocks, agreed prospective case loads with providers and paid below-tariff rates for additional cases. Managerial performance, negotiated order and discursive control were the predominant media of power used by English, German and Italian commissioners.

Conclusions

Commissioning practice worked in certain respects differently from what NHS commissioning policy assumed. It was often laborious and uncertain. In the four English case study sites financial and ‘real-side’ contract negotiations were partly decoupled, clinician involvement being least on the financial side. Tariff systems weakened commissioners’ capacity to choose providers and control costs. Commissioners adapted the systems to solve this problem. Our findings suggest a need for further research into whether or not differently owned providers (corporate, third sector, public, professional partnership, etc.) respond differently to health-care commissioners and, if so, what specific implications for commissioning practice follow. They also suggest that further work is needed to assess how commissioning practices impact on health system integration when care pathways have to be constructed across multiple providers that must tender competitively for work, perhaps against each other.

Funding

The National Institute for Health Research Health Services and Delivery Research programme.

Chance Constrained Input Relaxation to Congestion in Stochastic DEA. An Application to Iranian Hospitals

This article developed an approached model of congestion, based on relaxed combination of inputs, in stochastic data envelopment analysis (SDEA) with chance constrained programming approaches. Classic data envelopment analysis models with deterministic data have been used by many authors to identify congestion and estimate its levels; however, data envelopment analysis with stochastic data were rarely used to identify congestion. This article used chance constrained programming approaches to replace stochastic models with ‘‘deterministic equivalents”. This substitution leads us to non-linear problems that should be solved. Finally, the proposed method based on relaxed combination of inputs was used to identify congestion input in six Iranian hospital with one input and two outputs in the period of 2009 to 2012.

Does ownership matter? An overview of systematic reviews of the performance of private for-profit, private not-for-profit and public healthcare providers

INTRODUCTION

Ownership of healthcare providers has been considered as one factor that might influence their health and healthcare related performance. The aim of this article was to provide an overview of what is known about the effects on economic, administrative and health related outcomes of different types of ownership of healthcare providers--namely public, private non-for-profit (PNFP) and private for-profit (PFP)--based on the findings of systematic reviews (SR).

METHODS AND FINDINGS

An overview of systematic reviews was performed. Different databases were searched in order to select SRs according to an explicit comprehensive criterion. Included SRs were assessed to determine their methodological quality. Of the 5918 references reviewed, fifteen SR were included, but six of them were rated as having major limitations, so they weren't incorporated in the analyses. According to the nine analyzed SR, ownership does seem to have an effect on health and healthcare related outcomes. In the comparison of PFP and PNFP providers, significant differences in terms of mortality of patients and payments to facilities have been found, both being higher in PFP facilities. In terms of quality and economic indicators such as efficiency, there are no concluding results. When comparing PNFP and public providers, as well as for PFP and public providers, no clear differences were found.

CONCLUSION

PFP providers seem to have worst results than their PNFP counterparts, but there are still important evidence gaps in the literature that needs to be covered, including the comparison between public and both PFP and PNFP providers. More research is needed in low and middle income countries to understand the impact on and development of healthcare delivery systems.

Harnessing the privatisation of China's fragmented health-care delivery

Although China's 2009 health-care reform has made impressive progress in expansion of insurance coverage, much work remains to improve its wasteful health-care delivery. Particularly, the Chinese health-care system faces substantial challenges in its transformation from a profit-driven public hospital-centred system to an integrated primary care-based delivery system that is cost effective and of better quality to respond to the changing population needs. An additional challenge is the government's latest strategy to promote private investment for hospitals. In this Review, we discuss how China's health-care system would perform if hospital privatisation combined with hospital-centred fragmented delivery were to prevail--population health outcomes would suffer; health-care expenditures would escalate, with patients bearing increasing costs; and a two-tiered system would emerge in which access and quality of care are decided by ability to pay. We then propose an alternative pathway that includes the reform of public hospitals to pursue the public interest and be more accountable, with public hospitals as the benchmarks against which private hospitals would have to compete, with performance-based purchasing, and with population-based capitation payment to catalyse coordinated care. Any decision to further expand the for-profit private hospital market should not be made without objective assessment of its effect on China's health-policy goals.

The Painful Effects of the Financial Crisis on Spanish Health Care

Spain has an advanced, integrated health care system that has achieved remarkable results, including substantially improved health outcomes, over a relatively short time. Measures introduced by central and regional governments to combat the financial crisis may be severely affecting the health sector, with proposed changes potentially threatening the principles of equity and social cohesion underlying the welfare state. This article examines recent developments in Spanish health care, focusing on the austerity measures introduced since 2010. In Spain, as in other countries, evaluation of health care changes is difficult due to the paucity of data and because the effects of measures often lag well behind their introduction, meaning the full effects of changes on access to care or health outcomes only become apparent years later. However, some effects are already clear. With exceptions, Spain has not used the crisis as an opportunity to increase efficiency and quality, rationalize and reorganize health services, increase productivity, and regain public trust. We argue that immediate health care cuts may not be the best long-term answer and suggest evidence-driven interventions that involve the portfolio of free services and the private sector, while ensuring that the most vulnerable are protected.

Efficiency, ownership, and financing of hospitals: the case of Austria

While standard economic theory posits that privately owned hospitals are more efficient than their public counterparts, no clear conclusion can yet be drawn for Austria in this regard. As previous Austrian efficiency studies rely on data from the 1990s only and are based on small hospital samples, the generalizability of these results is questionable. To examine the impact of ownership type on efficiency, we apply a Data Envelopment Analysis which extends the existing literature in two respects: first, it evaluates the efficiency of the Austrian acute care sector, using data on 128 public and private non-profit hospitals from the year 2010; second, it additionally focusses on the inpatient sector alone, thus increasing the comparability between hospitals. Overall, the results show that in Austria, private non-profit hospitals outperform public hospitals in terms of technical efficiency. A multiple regression analysis confirms the significant association between efficiency and ownership type. This conclusive result contrasts some international evidence and can most likely be attributed to differences in financial incentives for public and private non-profit hospitals in Austria. Therefore, by drawing on the example of the Austrian acute care hospital sector and existing literature on the German acute care hospital sector, we also discuss the impact of hospital financing systems and their incentives on efficiency. This paper thus also aims at providing a proof of principle, pointing out the importance of the respective market conditions when internationally comparing hospital efficiency by ownership type.

Improving patient-level costing in the English and the German 'DRG' system

OBJECTIVES

The purpose of this paper is to develop ways to improve patient-level cost apportioning (PLCA) in the English and German inpatient 'DRG' cost accounting systems, to support regulators in improving costing schemes, and to give clinicians and hospital management sophisticated tools to measure and link their management.

METHODS

The paper analyzes and evaluates the PLCA step in the cost accounting schemes of both countries according to the impact on the key aspects of DRG introduction: transparency and efficiency. The goal is to generate a best available PLCA standard with enhanced accuracy and managerial relevance, the main requirements of cost accounting.

RESULTS

A best available PLCA standard in 'DRG' cost accounting uses: (1) the cost-matrix from the German system; (2) a third axis in this matrix, representing service-lines or clinical pathways; (3) a scoring system for key cost drivers with the long-term objective of time-driven activity-based costing and (4) a point of delivery separation.

CONCLUSION

Both systems have elements that the other system can learn from. By combining their strengths, regulators are supported in enhancing PLCA systems, improving the accuracy of national reimbursement and the managerial relevance of inpatient cost accounting systems, in order to reduce costs in health care.

Assessing DRG cost accounting with respect to resource allocation and tariff calculation: the case of Germany

The purpose of this paper is to analyze the German diagnosis related groups (G-DRG) cost accounting scheme by assessing its resource allocation at hospital level and its tariff calculation at national level. First, the paper reviews and assesses the three steps in the G-DRG resource allocation scheme at hospital level: (1) the groundwork; (2) cost-center accounting; and (3) patient-level costing. Second, the paper reviews and assesses the three steps in G-DRG national tariff calculation: (1) plausibility checks; (2) inlier calculation; and (3) the "one hospital" approach. The assessment is based on the two main goals of G-DRG introduction: improving transparency and efficiency. A further empirical assessment attests high costing quality. The G-DRG cost accounting scheme shows high system quality in resource allocation at hospital level, with limitations concerning a managerially relevant full cost approach and limitations in terms of advanced activity-based costing at patient-level. However, the scheme has serious flaws in national tariff calculation: inlier calculation is normative, and the "one hospital" model causes cost bias, adjustment and representativeness issues. The G-DRG system was designed for reimbursement calculation, but developed to a standard with strategic management implications, generalized by the idea of adapting a hospital's cost structures to DRG revenues. This combination causes problems in actual hospital financing, although resource allocation is advanced at hospital level.