Comparing public and private providers : a scoping review of hospital services in Europe

RESEARCH ARTICLE Open Access Comparing public and private providers: a scoping review of hospital services in Europe Liina-Kaisa Tynkkynen 1* and Karsten Vrangbæk 2 Abstract Background: What is common to many healthcare systems is a discussion about the optimal balance between public and private provision. This paper provides a scoping review of research comparing the performance of public and private hospitals in Europe. The purpose is to summarize and compare research findings and to generate questions for further studies. Methods: The review was based on a methodological approach inspired by the British EPPI-Centre’s methodology. This review was broader than review methodologies used by Cochrane and Campbell and included a wider range of methodological designs. The literature search was performed using PubMed, EconLit and Web of Science databases. The search was limited to papers published from 2006 to 2016. The initial searches resulted in 480 studies. The final sample was 24 papers. Of those, 17 discussed economic effects, and seven studies addressed quality. Results: Our review of the 17 studies representing more than 5500 hospitals across Europe showed that public hospitals are most frequently reported as having the best economic performance compared to private not-for-profit (PNFP) and private for-profit (PFP) hospitals. PNFP hospitals are second, while PFP hospitals are least frequently reported as superior. However, a sizeable number of studies did not find significant differences. In terms of quality, the results are mixed, and it is not possible to draw clear conclusions about the superiority of an ownership type. A few studies analyzed patient selection. They indicated that public hospitals tend to treat patients who are slightly older and have lower socioeconomic status, riskier lifestyles and higher levels of co-morbidity and complications than patients treated in private hospitals. Conclusions: The paper points to shortcomings in the available studies and argues that future studies are needed to investigate the relationship between contextual circumstances and performance. A big weakness in many studies addressing economic effects is the failure to control for quality and other operational dimensions, which may have influenced the results. This weakness should also be addressed in future comparative studies. Keywords: Healthcare, Hospitals, Private providers, Not-for-profit providers, For-profit providers, Europe, Specialized care services, Scoping review * Correspondence: [email protected] 1 Faculty of Social Sciences, University of Tampere, FI-33100 Tampere, Finland Full list of author information is available at the end of the article © The Author(s). 2018 Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made. The Creative Commons Public Domain Dedication waiver (http://creativecommons.org/publicdomain/zero/1.0/) applies to the data made available in this article, unless otherwise stated. Tynkkynen and Vrangbæk BMC Health Services Research (2018) 18:141 https://doi.org/10.1186/s12913-018-2953-9 Background Public funding, as well as public provision of healthcare services, has been a key feature of many modern welfare states. However, since the 1980s the realms of the public and private sectors have been redefined in many countries [43]. At the same time, systems financed through social or private insurance have developed new ways of organizing their relationships with providers. What is common to all healthcare systems is a discussion about the optimal balance between public and private provision. In a seminal paper from 1963, Kenneth Arrow demonstrated that health care has a number of characteristics that violate the principles of a perfect market [3]. Healthcare consumers do not have sufficient information to know when and to what extent health care is needed or to compare alternatives. Externalities are not incorporated in decision making, and patients risk catastrophic losses in the event of serious illness. Attempts to solve this problem through private insurance carry other risks in terms of adverse selection and moral hazards. As a consequence, all modern healthcare systems have some degree of public involvement in the regulation, financing or provision of services. The implication is that health care is delivered in highly regulated markets with different combinations of public and private actors [7]. This leads us to ask whether there is evidence that private delivery organizations perform better than public delivery organizations in regulated health care markets. We investigated this question by conducting a scoping review of the available evidence from recent studies within the European region. Although this region includes different types of healthcare systems, all countries rely considerably on public or not-for-profit providers in addition to some degree of private for-profit delivery. Focusing on the European region allowed us to include systems that are based on similar values about solidarity, while excluding studies from countries with radically different underlying values, such as the United States (US) and Singapore. At the same time, by including the entire region, we can expand on the degree of diversity and volume compared to previous studies, such as Tiemann et al. [50]. Our method was a scoping review which aimed to summarize and compare previous studies presenting evidence on differences in performance between public and private hospitals in European healthcare systems. Scoping reviews aim to “map rapidly the key concepts underpinning a research area and the main sources and types of evidence available and can be undertaken as stand-alone projects in their own right”[2].Thespecificpurposeofthisreview was to summarize and compare research findings, to relate the findings to previous reviews and to generate questions for further studies and systematic reviews. Theoretical perspectives on public–private comparisons Theoretical claims for positive effects of private ownership typically stem from public choice and property rights theories, which revolve around a competition and a public management/ownership argument, respectively [1,13,21]. The competition argument states that although healthcare markets may be imperfect, competition in itself can have beneficial effects. Private providers are forced by competitive pressure to optimize efficiency, while political and administrative pressures are more important for public providers. The lack of competitive pressures means that public managers are unable to measure the efficiency of their organizations against a commercial bottom line. Decisions on resource allocation and survival of the organization are left to public decision makers who cannot rely on market prices to generate an equilibrium between demand and supply. The public management/ownership argument states that public sector organizations lack incentives to perform efficiently, these organizations often have broad and conflicting objectives, and they have no bankruptcy constraint. That is, they can continue to perform at sub-optimal levels without the risk of going out of business [1]. Furthermore, public organizations are not accountable to shareholders and owners and therefore, potentially have less external pressure to focus on innovation and technological development. Finally, it has been argued that a major difference between public and private hospitals is that public hospitals tend to operate in settings with “soft budget constraints”[22,40]. Some countries have tried to overcome this difference through various types of purchaser–provider splits [7]andlegislation regarding hard budget constraints such as the Danish “Budget Law.” Several theoretical contributions have nuanced and broadened the expectations from public choice and property rights theory [10,53]. Transaction cost economics emphasizes the importance of asset specificity and the measurability of the services that are provided in the market [15,54]. Rather than approaching public services as something that would, by definition, be more effectively produced in a private market, transaction cost economics hypothesizes that different service characteristics create more or less favorable conditions for inhouse production and contracting [29]. Economic benefits from contracting are more likely to be realized if the quantity and quality of the services can be unambiguously described and measured. Otherwise, the costs of preparing tenders, evaluating bids, signing contracts and monitoring (and possibly sanctioning) service delivery are likely to be high. The largest economic effects, thus, are expected in technical services characterized by low asset specificity and high measurability, whereas smaller Tynkkynen and Vrangbæk BMC Health Services Research (2018) 18:141 Page 2 of 14 or even negative economic effects would be expected in complex services with high asset specificity and low measurability. For hospitals, this would lead us to expect that standardized procedures, for example, within some surgical areas and technical support functions are more likely to provide privatization benefits than complex services within the field of psychiatry or geriatrics, for instance. Hospitals are complex organizations, which typically include highand low-specificity services. According to asset specificity theory, this leads to additional uncertainty about the benefits of privatization compared to the competition and ownership argument. Industrial organization theory stresses a number of factors that make public markets distinct from traditional private markets and thus, create less optimal conditions for contracting out than expected by public choice theory [10]. According to this perspective, many public services are characterized by natural monopolies and high entrance costs, which limit competition and potentially make highly regulated markets with public providers less efficient than private markets [26]. Principal-agent theory further emphasizes the problem of information particularly in markets for welfare services, such as health, social and child care, where those buying the service have limited insight into the actual delivery practice of the agents. The presence of information asymmetries can lead to goal displacement and unwanted practices, such as “cream-skimming”(selection of the easiest tasks) and “parking”of the least profitable clients. This can endanger the system-level benefits assumed in perfect market conditions. Decreasing marginal effects from contracting out suggests that economic effects tend to decrease over time [8,34,35]. There are two theoretical claims behind this argument. First, it is likely that rational purchasing organizations begin with contracting out those services and tasks where the largest gains are expected. Once the organizations have harvested the low hanging fruits, we can expect decreasing benefits from additional contracting out [9,34]. Second, involvement of private providers creates competitive pressure on public in-house production units, which may lead to more effective public production [5]. The market mechanism and exposure to competition, according to this argument, increase the efficiency of not only the contracted services but also the internally produced services [9]. Once the public providers have adjusted their operational practices, there will be few or no additional gains from switching to private providers. The focus of this paper was to provide an empirical overview of efficiency results as reported in the empirical studies we identified in our database searches. The studies employed slightly different definitions and techniques (see Table 3), but data envelopment analysis (DEA) and stochastic frontiers analysis (SFA) techniques dominate. Technical and allocative efficiency comprises “overall efficiency”[33]. Technical efficiency is producing the maximum amount of output from a given amount of input or alternatively, producing a given output with minimum input quantities, such that when an organization is technically efficient, it operates on its production frontier. Allocative efficiency occurs when the input mix is that which minimizes cost, given input prices or alternatively, when the output mix is that which maximizes revenue, given output prices. In addition to efficiency differences, we reviewed evidence of potential quality differences and operational differences between public and privately owned organizations. Operational differences include factors such as patient selection, staff composition and procedures that may include thresholds for admissions. In terms of quality, the measurements used were diverse which made it difficult to draw clear conclusions across the studies. Still, quality and operational parameters are important as they relate to other policy objectives than efficiency. However, very few studies embarked on multidimensional assessments, and narrow efficiency measures were, by far, the most commonly reported dimension. Setting the stage: The results from previous review studies We start by summarizing state-of-the-art as presented in previous international review papers that examined differences in economic and/or quality performance between private and public hospital organizations. The review studies were not included in the core sample, as we focused on primary studies published from 2006 to 2016 within the European region. Herrera et al. [32] provided an overview of systematic reviews of the performance of private for-profit (PFP), private not-for-profit (PNFP) and public healthcare providers. The authors reviewed 5918 references to identify systematic reviews and ended up with nine relevant studies of sufficiently high quality. According to the nine systematic reviews, ownership appears to have an effect on healthand healthcare-related outcomes. In the comparison of PFP and PNFP providers, significant differences in terms of patient mortality and payments to facilities were found; both were higher in PFP facilities. In terms of quality and economic indicators, such as efficiency, there were no significant results. When PNFP and public providers were compared, as well as PFP and public providers, no clear differences were found. The overall conclusion from the study was that PFP providers seem to have poorer results than their PNFP counterparts, but there are still important evidence gaps in the literature that need to be covered. Tynkkynen and Vrangbæk BMC Health Services Research (2018) 18:141 Page 3 of 14 Currie et al. [18]reviewed34studies.Mostofthese studies found no difference between PFP and PNFP full-service hospitals in terms of relative costs, quality of care or efficiency. Shen et al. [46]employeda quantitative method when reviewing 40 studies to identify the factors that explain the different findings for cost, revenue, profit margin and efficiency in the empirical literature. The authors found that variations in the magnitudes of ownership effects could be explained by the research focus and methodology of the individual studies. Studies using empirical methods that controlled for a few confounding factors tended to find larger differences between PFP and PNFP hospitals than studies that controlled for a wider range of confounding factors. Functional form and sample size also matter. Failure to apply log transformation to highly skewed expenditure data yielded misleadingly large estimated differences between PFP hospitals and PNFP hospitals. Studies with fewer than 200 observations also produced larger point estimates and wider confidence intervals. In a follow-up study conducted in 2008 by Egglestone et al., the authors found that pooled estimates of ownership effects are sensitive to the subset of studies included and the extent of overlap among hospitals analyzed in the underlying studies [23]. Ownership appears to be systematically related to differences in quality among hospitals in several contexts. Whether studies found PFP and public hospitals have higher mortality rates or rates of adverse events than their PNFP counterparts depended on the data sources, time period and region covered. Tiemann et al. [50] investigated hospital ownership and efficiency in a review of studies that focused on Germany. The authors concluded that in line with the evidence found in studies from other countries, especially the US, the evidence from Germany suggests that private ownership (i.e., PFP and PNFP) is not necessarily associated with higher efficiency compared to public ownership. Irvin’s[36] review of studies of U.S. healthcare organizations showed that there is a quality gap between for-profit and nonprofit firms in some healthcare sectors (long-term care and mental health), depending on the prevailing type of financial payment for health care. Hollingsworth [33] reviewed 317 studies published until 2006. He concluded cautiously “that public provision may be potentially more efficient than private, in certain settings.” The overall impression from previous review studies is mixed. Some studies found that public hospitals are more efficient than private, while others found no significant difference. In general, it appears that PNFP hospitals tend to be closer to public hospitals in outperforming PFP hospitals in terms of quality and efficiency. These diverging and somewhat surprising results inspired two groups of scholars [23,46]) to investigate the methodological basis for the results. The authors emphasized that case selection, methodological approach, time period and region are important underlying factors. A general observation across the studies was that the true effect of ownership seems to depend on the institutional context and that there are significant differences across regions and markets and over time. Methods The aim of this paper was to add an update to the results described above. We do that by providing a scoping review of peer-reviewed primary studies on public–private comparisons in specialized health care. We focused on studies that were conducted over the past decade within the European region. Scoping reviews aim to “map rapidly the key concepts underpinning a research area and the main sources and types of evidence available and can be undertaken as stand-alone projects in their own right [2]. These reviews can typically have any of four motivations: (1) to “examine the extent, range and nature of research activity,”that is, a mapping to elucidate the extent and range of research in the area; (2) “to determine the value of undertaking a full systematic review”; (3) to “summarize and disseminate research findings”, operating in the direction of a systematic review, describing findings in greater detail and acting to summarize and disseminate findings to key stakeholder audiences with the intention of informing those stakeholders and eliminating or reducing the need to undertake a more in-depth review; and (4) to “identify research gaps in the existing literature.” In our case, we aimed to summarize research findings and generate questions for further studies and systematic reviews. The review was based on a methodical approach inspired by the British EPPI-Centre’s methodology. This review was broader than review methodologies used within the Cochrane and Campbell collaborations, which emphasized randomized controlled trials (RCTs) as the gold standard [38]. The present review also included a broader range of methodological designs and quantitative and qualitative studies Petersen et al. [42]. The literature search was conducted using PubMed, EconLit and Web of Science databases. The search was limited to papers published from 2006 to 2016. The limitation to the most recent decade was to avoid too much overlap with previous reviews while including the most recent studies. The inclusion criteria were papers written in English that dealt with the European region. The search strategies for the databases are presented in Table 1. Tynkkynen and Vrangbæk BMC Health Services Research (2018) 18:141 Page 4 of 14 The assessment and compilation of the final sample of relevant studies included three phases. Phase 1 included a search for relevant literature. The initial searches resulted in 480 studies: 354 from PubMed, 93 from EconLit and 53 from Web of Science of which some were duplicates. In phase 2, the abstracts were sorted using the categories not relevant, perhaps relevant and relevant. The not relevant category included papers that were not based in Europe or in which public–private comparisons were not found. The perhaps relevant category included papers whose suitability could not be judged solely on the abstract. Phase 3 included the final assessment of the relevance of the papers. For the relevant or perhaps relevant abstracts, the full papers were further examined, which resulted in grouping the studies that were finally included in the study and studies that were found not relevant after the full paper was read. In this phase, the not relevant papers were mostly theoretical papers, papers in which there were, eventually, no empirical public–private comparisons or very vague descriptions of the comparative material. At this stage of the process, we also excluded studies that addressed outsourcing, privatization and corporatization of hospitals with a focus on the dynamic process of transfer from one ownership type to another. The final sample of studies that fulfilled the inclusion criteria was 24 papers. All of the papers were published in peer-reviewed journals, and we did not conduct further quality evaluations as the papers had undergone a peer-review process (Fig. 1). The studies represented 10 countries (Table 2). Since 2006, we observed a slight increase in the number of papers published on the subject (Fig. 2). This increase confirms the trend observed by Hollingsworth although he reported a “dramatic”increase over the past decades [33]. Most often, the studies in this sample involved comparisons of two groups: public and private hospitals (n=13). However, the definitions of public and private varied. Eleven studies made clear distinctions between public, PFP and PNFP hospitals. Economic effects were explored in 17 studies and quality in seven studies (in three studies, Table 1 Search strategies and databases Database Search strategy PubMed (354 hits) ((“ownership”[MeSH Terms] OR “ownership”[All Fields]) OR (“contracts”[MeSH Terms] OR “contracts”[All Fields] OR “contracting”[All Fields]) OR (“outsourced services”[MeSH Terms] OR (“outsourced”[All Fields] AND “services”[All Fields]) OR “outsourced services”[All Fields] OR “outsourcing”[All Fields]) OR bidding[All Fields]) AND (public[All Fields] AND (“patients’rooms”[MeSH Terms] OR (“patients’“[All Fields] AND “rooms”[All Fields]) OR “patients’rooms”[All Fields] OR “private”[All Fields])) AND ((“economics”[Subheading] OR “economics”[All Fields] OR “cost”[All Fields] OR “costs and cost analysis”[MeSH Terms] OR (“costs”[All Fields] AND “cost”[All Fields] AND “analysis”[All Fields]) OR “costs and cost analysis”[All Fields]) OR saving[All Fields] OR quality[All Fields] OR (“efficiency”[MeSH Terms] OR “efficiency”[All Fields])) AND (“hospitals”[MeSH Terms] OR “hospitals”[All Fields] OR “hospital”[All Fields]) AND (“2006/09/11”[PDat]: “2016/09/ 07”[PDat] AND English[lang]) EconLit (93 hits) (hospital* AND (ownership OR contracting OR outsourc* OR bid*) AND (cost* OR saving* OR quality OR efficiency)) Web of Science (53 hits) (((hospital) AND (ownership OR contracting OR outsourcing OR bidding) AND (public AND private) AND (cost OR saving OR quality OR efficiency))) Refined by: LANGUAGES: (ENGLISH) AND DOCUMENT TYPES: (ARTICLE) AND COUNTRIES/TERRITORIES: (GREECE OR ENGLAND OR GERMANY OR NETHERLANDS OR NORWAY OR ITALY OR DENMARK OR SWEDEN OR FINLAND OR SCOTLAND OR FRANCE OR WALES OR CZECH REPUBLIC OR BELGIUM OR CROATIA OR SLOVAKIA OR AUSTRIA) Timespan: 2006–2016. Indexes: SCI-EXPANDED, SSCI, A&HCI, ESCI. Fig. 1 Overview of the review procedure Tynkkynen and Vrangbæk BMC Health Services Research (2018) 18:141 Page 5 of 14 it was used as a control for economic effects). Patient selection was mentioned in 15 studies but discussed explicitly in only seven studies. Results The majority of the studies (n= 17) found in the database searches addressed the economic performance of public and private specialized care organizations. Seven studies addressed quality. In terms of economic performance, 15 studies compared public (PUB) hospitals to PFP hospitals. Some studies reported technical, cost and profit efficiency (see Table 3). About half of these studies reported that public hospitals are superior to PFP hospitals in terms of efficiency. Most of the other studies found insignificant differences. Only one study reported that PFP hospitals have better profit efficiency. Eight studies compared the performance of PFP and PNFP hospitals. The majority of these studies found that PNFP hospitals are superior in terms of technical, cost and profit efficiency. Only one study pointed to responsiveness as a performance measure where PFP hospitals are better than PNFP hospitals. Finally, we found 11 studies compared PUB and PNFP hospitals. Most of these studies reported insignificant differences. In the remaining studies, we found slightly more studies presented PUB hospitals as superior to PNFP hospitals. Overall, it seems that in terms of economic performance the public hospitals in the 17 studies representing more than 5500 hospitals across Europe perform better than PNFP hospitals, which, in turn, perform better than PFP hospitals. However, a sizeable number of studies did not find significant differences. In terms of quality, the results were mixed, and it is not possible to draw clear conclusions about the superiority of an ownership type. The following sections provide details about the studies and their results. Economic performance: Technical, cost and profit efficiency Berry et al. [11] looked at operating room productivity in independent anesthesiology departments within German hospitals by using survey data from 87 hospitals. The authors hypothesized that operating room productivity is higher for hospitals run by private corporations compared to those run by the public sector. In the analysis, they found some confirmation of this idea but presented no significant results. The overall conclusion was that hospital size is the single largest predictor of productivity. However, the authors also suggested that micro-level management processes matter. Kontodimopoulos et al. [39] found that after controlling for contextual characteristics technical efficiency was not significantly different between public and private dialysis facilities in Greece. The authors concluded that the context rather than ownership influences the performance of service providers. Barbetta et al. [6] stressed the importance of contextual factors and reimbursement practices in a study in which they looked at the technical efficiency of public and PNFP hospitals in Italy. The authors suggested that the differences in economic performance are related to institutional settings in which providers operate rather than to the ownership per se. Table 2 Number of studies by country Austria Denmark England France Germany Greece Italy Norway Spain Switzerland No of studies 1 3 2 1 6 2 5 1 1 2 Fig. 2 Number of studies by year Tynkkynen and Vrangbæk BMC Health Services Research (2018) 18:141 Page 6 of 14 Table 3 Empirical studies reporting economic effects Study and sample characteristics Methods and control variables Difference between ownership type (better is indicated) a Country Years Sample size Main focus Patient heterogeneity Hospital characteristics Market or environmental characteristics b Quality of care PB vs. PFP PB vs. PNFP PFP vs. PNFP CaballerTarazona et al. [17] Spain 2009– 2010 29 hospitals DEA c - Efficiency X X n.s. Bonastre et al. [14] France 2007– 2008 448 hospitals The use of expensive anticancer drug X n.s –– Czypionka et al. [19] Austria 2010 128 hospitals DEA –technical efficiency X X X –PNFP – Siciliani et al. [45] England 2006– 2007 193 hospitals or clinics Length of stay X X X PFP d Augurzky et al. [4] Germany 2001– 2005 331 hospitals Probability of default X X PFP PNFP PNFP Kondilis et al. [37] Greece 2001– 2003 320–330 hospitals The operation and performance: 1) nurse staffing rates 2) ALoS 3) SHI e payments for hospital care per patient discharged. XPB perf,f PB payments,g –– Herr et al. [31] Germany 2002– 2006 541 hospitals or small chains SFA h - Technical, cost and profit efficiency X X X x n.s tech n.s cost PFP profit n.s. tech n.s. cost PNFP profit – Schwierz [49] Germany 1996– 2006 16,356,428 patient admissions to 1817 hospitals (2006) and 14,921,393 patient admissions to 2040 hospitals (1996) Responsiveness to changes in demand for hospital services X x PFP n.s. FP Berta et al. [12] Italy 1998– 2007 The full population of patients and hospitals operating in Lombardy, c. 20,000,000 admissions DEA - Technical efficiency X X PB n.s. NP Kontodimopoulos et al. [39] Greece 2004 124 dialysis facilities DEA –technical efficiency X X n.s. Daidone and D’Amico [20] Italy 2000– 2005 108 hospitals SFA - Technical and cost efficiency X X X PB PB PNFP Tiemann et al. [51] Germany 2002– 2006 1046 DEA –Technical efficiency X X X X PB PB n.s. Herr [30] Germany 2000– 2003 1556–1635 hospitals SFA - cost and technical efficiency X X X PB PB PNFP Tynkkynen and Vrangbæk BMC Health Services Research (2018) 18:141 Page 7 of 14 Table 3 Empirical studies reporting economic effects (Continued) Farsi and Filippini [25] Switzerland 1998– 2003 148 hospitals SFA - cost efficiency (ownership and different subsidy types) X n.s. n.s. n.s. Farsi [24] Switzerland 1998– 2002 214 hospitals SFA - cost efficiency (ownership and different subsidy types) X n.s. n.s. n.s. Berry et al. [11] Germany 2002– 2003 89 hospitals Operating room productivity X X n.s Barbetta et al. [6] Italy 1995– 2000 531 hospitals DEA, SFA, COLS i - technical efficiency in two periods: 1995–1997 before DRG j payment system introduction 1998–2000 after DRG payment system introduction XNP 1995– 1997 n.s. 1998– 2000 a PB public, PFP private for-profit, PNFP private not-for-profit b Environmental characteristics included here c DEA data envelop analysis d When private specialized treatment center (STCs) are compared with public hospitals. In addition, public STCs did better than hospitals, but private ones outperformed them as well e SHI Social Health Insurance f PFP hospitals have lower bed capacity, lower occupancy rates and lower nurse (total and high qualified) staffing rates compared to public hospitals and are associated with higher unweighted length of stay g PFP hospitals have higher SHI payments per discharge h SFA stochastic frontiers analysis i COLS corrected ordinary least squares j DRG diagnosis related group Tynkkynen and Vrangbæk BMC Health Services Research (2018) 18:141 Page 8 of 14 Czypionka et al. [19] looked at the impact of ownership on efficiency in Austria. Contrary to several previous studies, the authors found that there is a significant association between efficiency and ownership when comparing public and PNFP hospitals. The latter outperform public hospitals in technical efficiency due to different financial incentives. Herr [30] found that in Germany PFP and PNFP hospitals are, on average, less cost-efficient and less technically efficient than publicly owned hospitals. This result can be partly explained by the importance of length of stay, which was, at the time, highest in PFP hospitals. Similar results were found in the study by Tiemann and Schreyögg [51] who evaluated the efficiency of public, PFP and PNFP hospitals in Germany. The results showed that public hospitals perform significantly better than PFP and PNFP hospitals. However, Herr et al. [31] found no significant differences in cost and profit efficiency between public and PFP hospitals in Germany. Daidone and D’Amico [20] looked at how the production structure and level of specialization of a hospital affect its technical efficiency in Italy. They found that PFP hospitals use resources less efficiently compared to public and PNFP hospitals. PFP hospitals work in slightly over-staffed conditions for medical staff while public and especially PNFP hospitals are over-staffed by technical and administrative staff. Caballer-Tarazona et al. [17] compared public hospitals and public–private partnership (PPP) model hospitals in the Valencia region, but they were not able to determine the effect of ownership on efficiency due to the small sample size. Comparisons of costs and other economic outcomes Two studies—both from Switzerland employing similar data—found that hospital ownership does not affect hospital costs [24,25]. Bonastre et al. [14] analyzed the use of expensive anticancer drugs in public and private hospitals. The authors found that there were significant differences in terms of capacity, volume of activity and case mix between private and public hospitals, but after adjusting for the case mix, there were no differences in the use of expensive drugs between private and public hospitals. Kondilis et al. [37] compared the operation and performance of PFP and public hospitals in Greece, focusing on differences in nurse staffing rates, average lengths of stay and Social Health Insurance (SHI) payments (including per diem fees, plus additional fee-for-service payments for services provided during hospitalization) for hospital care per patient discharged. The authors found that there were differences between PFP and public providers operating within the mixed healthcare system. PFP hospitals had lower bed capacity, lower occupancy rates and lower nurse (total and high qualified) staffing rates compared to public hospitals. PFP hospitals are also associated with higher unweighted length of stay and higher payments per discharge, at least in the case of discharged patients are beneficiaries of the SHI funds. Siciliani et al. [45], in turn, studied patients’length of stay in public hospitals, specialized public treatment centers and private treatment centers that provide elective hip replacement in England. The authors found that public and private specialized treatment centers, on average, had 18% and 40% shorter lengths of stay, respectively, compared with public hospitals. The result remained the same after controlling for age, gender, diagnosis and market characteristics. They did not find that patient selection explains differences in the length of stay in different hospital settings. Augurzky et al. [4] studied the differences between public, PFP and PNFP ownership types in German hospitals based on their probability of default (PD). According to the results, public hospitals tend to exhibit a PD that is significantly above average. This association indicates that public ownership may conflict with financial sustainability. The authors explained it by stating that it is possible that public guarantees are the key driver to explain the differences. Public backing opens the window that ceteris paribus public hospitals may have higher PDs without being necessarily closer to insolvency than private hospitals. Schwierz [49] studied ownership-specific differences in the responsiveness of changes in demand for hospital services in Germany from 1996 to 2006. He found that in the speed of adaptation to increasing demand PFP ownership is superior to public and PNFP ownership. PFP providers also tend to expand in markets with decreasing demand. This result can be partly explained by the results found by Augurzky et al. [4] for higher probability of default. That is, the defaults of public hospitals nurture the process of privatization of public sector actors in a situation in which the public sector needs to reform their facilities and work practices while at the same time containing costs. Quality Solborg Bjerrum et al. [47,48] conducted two studies in Denmark that addressed the quality of elective surgeries in public and private hospitals. The 2015 study concerned patients who had cataract surgery in either public or private eye clinics or hospitals from 2002 to 2010. The results showed that patients who have cataract surgery in public hospitals have an overall statistically significant 62% higher mortality rate compared to patients who have cataract surgery in private hospitals or clinics. The potential explanation may be in the patient selection since the results indicate that patients who have cataract surgery in public hospitals are less healthy than Tynkkynen and Vrangbæk BMC Health Services Research (2018) 18:141 Page 9 of 14