Is There a Future for Small Hospitals in Germany?

19 Pages Posted: 3 Sep 2010

See all articles by Boris Augurzky

Boris Augurzky

Rhine-Westphalia Institute for Economic Research (RWI-Essen); IZA Institute of Labor Economics

Hendrik Schmitz

University of Duisburg-Essen - Department of Economics and Business Administration

Date Written: August 1, 2010

Abstract

We analyse the financial performance of small German hospitals based on balance sheet data of about 1,000 hospitals in 2007. Measures of financial performance are the earnings before interest, tax, depreciation, and amortisation (EBITDA) and the probability of default (PD). We find that, on average, small hospitals have more financial difficulties than large ones. However, there is considerable heterogeneity among small hospitals. While small private-for-profit hospitals tend to perform very well, small public hospitals face considerable financial problems. Apart from ownership, we find that specialisation, less subsidies in absolute terms, and a higher share of lump-sum subsidies are associated with a better financial performance.

Keywords: Hospital ownership, financial performance

JEL Classification: I11, I18

Suggested Citation

Augurzky, Boris and Schmitz, Hendrik, Is There a Future for Small Hospitals in Germany? (August 1, 2010). Ruhr Economic Paper No. 198, Available at SSRN: https://ssrn.com/abstract=1670593 or http://dx.doi.org/10.2139/ssrn.1670593

Boris Augurzky (Contact Author)

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

45128 Essen
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Hendrik Schmitz

University of Duisburg-Essen - Department of Economics and Business Administration ( email )

Universitätsstr. 9
Essen, 45141
Germany

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