Hendrik Schmitz

Profit efficiency and ownership of German hospitals

This paper investigates the cost and profit efficiency of German hospitals and their variation with ownership type. It is motivated by the empirical finding that private (for-profit) hospitals - having been shown to be less cost efficient in the past - on average earn higher profits than public hospitals. We conduct a Stochastic Frontier Analysis on a multifaceted administrative German data set combined with the balance sheets of 541 hospitals of the years 2002-2006. The results show no significant differences in cost efficiency but higher profit efficiency of private than of publicly owned hospitals.

Broke, Ill, and Obese: Is There an Effect of Household Debt on Health?

We analyze the association between household indebtedness and different health outcomes using data from the German Socio�?Economic Panel from 1999 to 2009. We control for unobserved heterogeneity by applying fixed�?effects methods and furthermore use a subsample of constantly employed individuals plus lagged debt variables to reduce problems of reverse causality. We apply different measures of household indebtedness, such as the percentage shares of household income spent on consumer credit and home loan repayments (which indicate the severity of household indebtedness) and a binary variable of relative overindebtedness (which indicates a precarious debt situation). We find all debt measures to be strongly correlated with health satisfaction, mental health, and obesity. This relationship vanishes for obesity after controlling for unobserved heterogeneity while it stays significant with respect to worse physical and mental health.

Broke, Ill, and Obese: The Effect of Household Debt on Health

We analyze the effect of household indebtedness on different health outcomes using data from the German Socio-Economic Panel from 1999-2009. To establish a causal effect, we rely on (a) fixed-effects methods, (b) a subsample of constantly employed individuals, and (c) lagged debt variables to rule out problems of reverse causality. We apply different measures of household indebtedness, such as the percentage shares of household income spent on consumer credit and home loan repayments (which indicate the severity of household indebtedness) and a binary variable of relative overindebtedness (which indicates a precarious debt situation). We find all debt measures to be strongly correlated with health satisfaction, mental health, and obesity. Controlling for unobserved heterogeneity and reversed causality we find evidence that household debt also causally deteriorates physical and mental health. However, there is no causal effect on being obese.

Does Price Framing Affect the Consumer Price Sensitivity of Health Plan Choice

This paper provides field evidence on how price framing affects consumers’ decision to switch health plans. In 2009 German federal regulation required insurers to express premium differences between standardized health plans in absolute euro values relative to a federal reference price, rather than in percentage point payroll tax differences. Representative individual-level panel data and aggregated health plan level panel data on the universe of health plans show that the reform strongly increased enrollees’ willingness to switch plans, with demand elasticities increasing fourfold. The salience of premium differences and the default premium are obviously key driving forces in the decision to switch insurers.

REGIONAL VARIATION IN THE UTILISATION OF AMBULATORY SERVICES IN GERMANY

We used an administrative dataset covering approximately 90% of all Germans to investigate the determinants of regional differences in the utilisation of ambulatory services in the year 2008. There are great regional differences in Germany, in GP, specialist and psychotherapist consultations. By means of a regression model taking account of the spatial dependencies of the error terms, we can explain a considerable part of the variation in terms of differences in demography, health status and socio-economic features. In addition, we made use of data on pollutants, the supply of services and the number of hospital cases as explanatory variables, which all have a significant influence on utilisation but contribute considerably less to explaining the differences. Overall, we are in a position to explain 29-40% of the regional differences in ambulatory case numbers at the level of the 413 counties and 55-70% at the level of the 16 German states (Länder) by observable differences.

Benefit-Entitlement Effects and the Duration of Unemployment: An Ex-Ante Evaluation of Recent Labour Market Reforms in Germany

We analyse benefit-entitlement effects and the likely impact of the recent reform of the unemployment compensation system on the duration of unemployment in Germany on the basis of a flexible discrete-time hazard rate model estimated on pre-reform data from the German Socioeconomic Panel (SOEP). We find (i) relatively strong benefit-entitlement effects for the unemployed who are eligible to means-tested unemployment assistance after the exhaustion of unemployment benefit, but not for those without such entitlement; (ii) non-monotonic benefit-entitlement effects on hazard rates with pronounced spikes around the month of benefit-exhaustion, and (iii) relatively small marginal effects of the amount of unemployment compensation on the duration of unemployment. Our simulation results show that the recent labour market reform is unlikely to have a major impact on the average duration of unemployment in the population as a whole, but will significantly reduce the level of long-term unemployment among older workers.

In Absolute or Relative Terms? How Framing Prices Affects the Consumer Price Sensitivity of Health Plan Choice

Health Plan Choice Abstract: This paper provides field evidence on (a) how price framing affects consumers’ decision to switch health insurance plans and (b) how the price elasticity of demand for health insurance can be influenced by policymakers through simple regulatory efforts. In 2009, in order to foster competition among health insurance companies, German federal regulation required health insurance companies to express price differences between health plans in absolute Euro values rather than percentage point payroll tax differences. Using individual-level panel data, as well as aggregated health plan-level panel data, we find that the reform led to a sixfold increase in an individual’s switching probability and a threefold demand elasticity increase.

How Health Plan Enrollees Value Prices Relative to Supplemental Benefits and Service Quality

This paper empirically assesses the relative role of health plan prices, service quality and optional benefits in the decision to choose a health plan. We link representative German SOEP panel data from 2007 to 2010 to (i) health plan service quality indicators, (ii) measures of voluntary benefit provision on top of federally mandated benefits, and (iii) health plan prices for almost all German health plans. Mixed logit models incorporate a total of 1,700 health plan choices with more than 50 choice sets for each individual. The findings suggest that, compared to prices, health plan service quality and supplemental benefits play a minor role in making a health plan choice.

Practice budgets and the patient mix of physicians – The effect of a remuneration system reform on health care utilisation

This study analyses the effect of a change in the remuneration system for physicians on the treatment lengths as measured by the number of doctor visits using data from the German Socio-Economic Panel over the period 1995-2002. Specifically, I analyse the introduction of a remuneration cap (so called practice budgets) for physicians who treat publicly insured patients in 1997. I find evidence that the reform of 1997 did not change the extensive margin of doctor visits but strongly affected the intensive margin. The conditional number of doctor visits among publicly insured decreased while it increased among privately insured. This can be seen as evidence that physicians respond to the change in incentives induced by the reform by altering their patient mix.

Determinants of Regional Variation in Health Expenditures in Germany

Health care expenditure in Germany shows clear regional differences. Such geographic variations are often seen as an indicator for inefficiency. With its homogeneous health care system, low co-payments and uniform prices, Germany is a particularly suited example to analyse regional variations. We use data for the year 2011 on expenditure, utilization of health services and state of health in Germanys statutory health insurance system. This data, which originate from a variety of administrative sources and cover about 90% of the population, are enriched with a wealth of socio-economic variables, data on pollutants, prices and individual preferences. State of health and demography explains 55% of the differences as measured by the standard deviation while all control variables account for a total of 72% of the differences at county level. With other measures of variation, we can account for an even greater proportion. A higher proportion of variation than usually supposed can thus be explained. Whilst this study cannot quantify inefficiencies, our results contradict the thesis that regional variations reflect inefficiency. Copyright