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

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.Hospital ownership, privatization, hospital market structure

Determinants of Avoidable Deaths from Ischaemic Heart Diseases in East and West Germany

The objective of this paper is to identify selected forces of the decrease in the number of avoidable deaths from ischaemic heart diseases (IHD) inWest and East Germany from 1996 to 2004. Our main result reveals that the number of intracardiac catheter facilities,which are an important diagnostic tool for IHD, do significantly account for decreases in avoidable mortality from IHD.This is important, as the modernization of the East German health sector included a considerable catch-up process in the number of IC facilities provided relative to West Germany.Avoidable deaths, ischaemic heart disease, intracardiac catheters, Germany

Ownership and Financial Performance in the German Hospital Sector

This paper considers the role of ownership form for the financial performance of German acute care hospitals and its development over time.We measure financial performance by a hospital-specific yearly probability of default (PD). Using a panel of hospital data, our models allow for state dependence in the PD as well as unobserved individual heterogeneity. We find that private ownership is more likely to be associated with sound levels in financial performance than public ownership. Moreover, state dependence in the PD is substantial, albeit not ownership-specific.Finally, our evidence suggests that overall efficiency may be enhanced most by closing down some loss-making public hospitals rather than by their restructuring, especially because the German hospital market has substantial excess capacities.Hospitals ownership, financial performance, state dependence

Does the Quality of Hospital Treatment Vary by Days of the Week?

This paper investigates the relationship between health outcomes and variations in staffing levels as approximated by admissions on weekdays versus admissions on weekends. Because days of admission are potentially endogenous, we instrument on emergency admissions only, which are reasonably exogenous to the time of admission. Further,we introduce a direct measure for within- diagnosis variation in severity across days of admission to control for the unobservable selection of patients.We find that after controlling for patient heterogeneity and endogeneity of the day of admission there is still a significant variation in mortality rates between weekend and weekday admissions. Patients admitted during the weekend exhibit higher in-hospital mortality rates. We also find signs of premature discharge, as patients with short lengths of stay tend to exhibit higher probability to be readmitted as emergency cases.Hospital quality, weekend effect, inpatient outcomes

The Impact of Private versus Social Health Insurance on Offered Waiting Times in German Acute Care Hospitals

This paper shows that patients with private health insurance (PHI) are being offered significantly shorter waiting times than patients with statutory health insurance (SHI) in German acute hospital care. This behavior may be driven by the higher expected profitability of PHI relative to SHI holders. Further,we find that hospitals offering private insurees shorter waiting times as compared to SHI holders have a significantly better financial performance than those abstaining from or with less discrimination.Private health insurance, waiting time, German acute care hospitals

Demand, Selection and Patient Outcomes in German Acute Care Hospitals

In times of peak demand hospitals may fail to deliver the high standard of treatment quality that they are able to offer their patients at regular times. To assess the magnitude of these effects, this study analyzes the effects of low staff-to-patients ratios on patient outcomes empirically.We use the variation of patient admissions over time as a proxy for varying staff level. Further, we control for within diagnosis unobservable variation in severity across days with as opposed to days without excess demand.We find that when this variation is ignored in the regression framework, the effect of demand on outcomes is biased upwards. The reason is that when demand is high more patients with a higher unobservable frailty are admitted to the hospitals. After having controlled for this selection of patients, excess demand does not negatively affect patient outcomes.Hospital staffing, inpatient outcomes

Cost-containment policies in public pharmaceutical spending in the EU

This paper presents and evaluates pharmaceutical policies in the EU aimed at the rational use of medicines and at keeping pharmaceutical spending under control. Policy makers are growing more aware that by regulating pharmaceutical markets correctly, considerable savings can be achieved without compromising the quality of care. Specifically, the paper makes the case that, by following numerous best-practices in pharmaceutical sector regulations, the value for money of pharmaceutical consumption could be substantially increased. Appropriate regulations can be relevant for pricing, reimbursement, market entry and expenditure control, as well as specific policies targeted at the distribution chain, physicians and patients

Cost-containment policies in public pharmaceutical spending in the EU

This paper presents and evaluates pharmaceutical policies in the EU aimed at the rational use of medicines and at keeping pharmaceutical spending under control. Policy makers are growing more aware that by regulating pharmaceutical markets correctly, considerable savings can be achieved without compromising the quality of care. Specifically, the paper makes the case that, by following numerous best-practices in pharmaceutical sector regulations, the value for money of pharmaceutical consumption could be substantially increased. Appropriate regulations can be relevant for pricing, reimbursement, market entry and expenditure control, as well as specific policies targeted at the distribution chain, physicians and patients

The rainy season in the Southern Peruvian Andes: A climatological analysis based on the new Climandes index

The rainy season is of high importance for livelihoods in the Southern Peruvian Andes (SPA), especially for agriculture, which is mainly rain fed and one of the main income sources in the region. Therefore, knowledge and predictions of the rainy season such as its onset and ending are crucial for planning purposes. However, such information is currently not readily available for the local population. Moreover, an evaluation of existing rainy season indices shows that they are not optimally suited for the SPA and may not be directly applicable in a forecasting context. Therefore, we develop a new index, named Climandes index, which is tailored to the SPA and designed to be of use for operational monitoring and forecasting purposes. Using this index, we analyse the climatology and trends of the rainy season in the SPA. We find that the rainy season starts roughly between September and January with durations between 3 and 8 months. Both onset and duration show a pronounced northeast-southwest gradient, regions closer to the Amazon Basin have a considerably longer rainy season. The inter-annual variability of the onset is very high, that is, 2–5 months depending on the station, while the end of the rainy season shows a much lower variability (i.e., 1.5–3 months). The spatial patterns of total precipitation amount and dry spells within the rainy season are only weakly related to its timing. Trends in rainy season characteristics since 1965 are mostly weak and not significant, but generally indicate a tendency towards a shortening of the rainy season in the whole study area due to a later onset and an increase in precipitation sums during the rainy season in the northwestern study area

Modelling European winter wind storm losses in current and future climate

Severe wind storms are one of the major natural hazards in the extratropics and inflict substantial economic damages and even casualties. Insured storm-related losses depend on (i) the frequency, nature and dynamics of storms, (ii) the vulnerability of the values at risk, (iii) the geographical distribution of these values, and (iv) the particular conditions of the risk transfer. It is thus of great importance to assess the impact of climate change on future storm losses. To this end, the current study employs—to our knowledge for the first time—a coupled approach, using output from high-resolution regional climate model scenarios for the European sector to drive an operational insurance loss model. An ensemble of coupled climate-damage scenarios is used to provide an estimate of the inherent uncertainties. Output of two state-of-the-art global climate models (HadAM3, ECHAM5) is used for present (1961-1990) and future climates (2071-2100, SRES A2 scenario). These serve as boundary data for two nested regional climate models with a sophisticated gust parametrizations (CLM, CHRM). For validation and calibration purposes, an additional simulation is undertaken with the CHRM driven by the ERA40 reanalysis. The operational insurance model (Swiss Re) uses a European-wide damage function, an average vulnerability curve for all risk types, and contains the actual value distribution of a complete European market portfolio. The coupling between climate and damage models is based on daily maxima of 10m gust winds, and the strategy adopted consists of three main steps: (i) development and application of a pragmatic selection criterion to retrieve significant storm events, (ii) generation of a probabilistic event set using a Monte-Carlo approach in the hazard module of the insurance model, and (iii) calibration of the simulated annual expected losses with a historic loss data base. The climate models considered agree regarding an increase in the intensity of extreme storms in a band across central Europe (stretching from southern UK and northern France to Denmark, northern Germany into eastern Europe). This effect increases with event strength, and rare storms show the largest climate change sensitivity, but are also beset with the largest uncertainties. Wind gusts decrease over northern Scandinavia and Southern Europe. Highest intra-ensemble variability is simulated for Ireland, the UK, the Mediterranean, and parts of Eastern Europe. The resulting changes on European-wide losses over the 110-year period are positive for all layers and all model runs considered and amount to 44% (annual expected loss), 23% (10years loss),50% (30years loss), and 104% (100years loss). There is a disproportionate increase in losses for rare high-impact events. The changes result from increases in both severity and frequency of wind gusts. Considerable geographical variability of the expected losses exists, with Denmark and Germany experiencing the largest loss increases (116% and 114%, respectively). All countries considered except for Ireland (−22%) experience some loss increases. Some ramifications of these results for the socio-economic sector are discussed, and future avenues for research are highlighted. The technique introduced in this study and its application to realistic market portfolios offer exciting prospects for future research on the impact of climate change that is relevant for policy makers, scientists and economist