Explaining Differentials in Subsidy Levels Among Hospital Ownership Types in Germany

Summary German hospitals receive subsidies for investment costs by federal states. Theoretically, these subsidies have to cover the whole investment volume, but in fact, only 50–60% are covered. Balance sheet data show that public hospitals exhibit higher levels of subsidies compared with for‐profit...

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Bibliographic Details
Published in:Health economics 2017-05, Vol.26 (5), p.566-581
Main Author: Pilny, Adam
Format: Article
Language:English
Subjects:
Assets
Blinder‐Oaxaca decomposition
Facilitation
Financing, Government - statistics & numerical data
Germany
Government subsidies
Hospitals
Hospitals - statistics & numerical data
Hospitals, Proprietary - statistics & numerical data
Hospitals, Public - statistics & numerical data
Humans
Investments
Models, Statistical
Ownership
Ownership - statistics & numerical data
Private sector
Subsidies
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Summary:Summary German hospitals receive subsidies for investment costs by federal states. Theoretically, these subsidies have to cover the whole investment volume, but in fact, only 50–60% are covered. Balance sheet data show that public hospitals exhibit higher levels of subsidies compared with for‐profit hospitals. In this study, I examine the sources of this disparity by decomposing the differential in a so‐called facilitation ratio, that is, the ratio of subsidies to tangible fixed assets, revealing to which extent assets are funded by subsidies. The question of interest is whether the differential can be attributed to observable hospital‐specific and federal state‐specific characteristics or to unobservable factors. Copyright © 2016 John Wiley & Sons, Ltd
ISSN:1057-9230
1099-1050
DOI:10.1002/hec.3327