Ownership, Incentives and Hospitals

Xavier Fageda and Eva Fiz ()
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Eva Fiz: Faculty of Economics, University of Barcelona

No 201012, IREA Working Papers from University of Barcelona, Research Institute of Applied Economics

Abstract: This article analyzes hospital privatization by comparing costs and quality between different ownership forms. We put the attention on the distinction between public hospitals and private hospitals with public funding. Using information about Spanish hospitals, we have found that private hospitals provide services at a lower cost at expenses of lower quality. We observe that property rights theory is fulfilled at least for the Spanish hospital market. The way that Heath Authorities finance publicly funded hospitals may be responsible for the differences in incentives between public and private centers. We argue that the trade-off between costs and quality could be minimized by designing financing contracts with fixed and variable components.

Keywords: Privatization, Hospitals, Costs, Quality. JEL classification:I11; L15; L33 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2010-09, Revised 2010-09
New Economics Papers: this item is included in nep-hea
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:ira:wpaper:201012

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