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The strange case of less C-sections: Hospital ownership, market concentration, and DRG-tariff regulation

Research output: Contribution to journal › Article › peer-review

Abstract

We evaluate the relationship between hospital ownership and responses to a policy providing large financial incentives for vaginal deliveries and financial disincentives for C-sections. We compare for-profit, nonprofit, and public hospitals operating in a public health care system organized according to the quasi-market model. We first theoretically show that hospital ownership matters insofar different hospitals are characterized by different ethical preferences. We also show that competition makes ownership less important. We then consider the case study of Lombardy in Italy. We exploit spatial variation in hospital ownership and in market concentration at the local level to evaluate the relationship between ownership and the probability of C-section. According to theory, empirical results strongly suggest that competitive pressures from alternative providers tend to homogenize behaviors. However, in local monopolies, in presence of a strong monetary incentive toward vaginal deliveries, we do observe less C-section from private for-profit hospitals than from public and private nonprofit hospitals, especially when C-sections are medically appropriate.
Original languageEnglish
Pages (from-to)30-46
Number of pages17
JournalHEALTH ECONOMICS
Volume29
Issue numberS1
DOIs
Publication statusPublished - 2020

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

  1. SDG 3 - Good Health and Well-being
    SDG 3 Good Health and Well-being

Keywords

  • C-sections
  • market for birth deliveries
  • public, for-profit, and nonprofit hospitals
  • tariff regulation

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