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Expansion in Markets with Decreasing Demand – For-Profits in the German Hospital Industry

Christoph Schwierz

No 106, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Over the last 20 years, acute care hospitals in most OECD have built up costly overcapacities. From the perspective of economic policy, it is desirable to know how hospitals of different ownership form respond to changes in demand and are probably best suited to deal with existing overcapacities. This paper examines ownership-specific differences in the responsiveness to changes in demand for hospital services in Germany between 1996 and 2006. With respect to the speed of adaptation to changes in demand, the study finds for-profit ownership to be superior to public and nonprofit ownership. Further, it is shown that declining demand can contribute to the expansion of for-profits through conversions by mainly publicly owned hospitals. Thus, the study finds evidence that to some extent the privatization of the hospital sector may be an adequate answer to reduce excess capacities.

Keywords: Hospital ownership; privatization; hospital market structure (search for similar items in EconPapers)
JEL-codes: I11 I12 L31 (search for similar items in EconPapers)
Date: 2009
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Journal Article: Expansion in markets with decreasing demand‐for‐profits in the German hospital industry (2011) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:106

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