The Impact of Privatization: Evidence from the Hospital Sector
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About the talk:
Privatization has been shown to improve the efficiency and growth of public firms.
However, the effects for consumers are understudied. We study potential trade-offs
in the case of US hospitals, where public control of capacity declined by 42% over
1983–2019. Across 257 transitions, privatized hospitals downsize capacity and patient
care, with Medicaid patients experiencing the greatest decline. While other patients
are reallocated across facilities, Medicaid patients experience an aggregate decline
in utilization at the market-level, which we interpret as a decline in access. Private
control substantially decreases labor intensity and related spending, consistent with
a trade-off between maintaining access and lowering costs.
About the speaker:
Mark Duggan, Ph.D. is The Trione Director of the Stanford Institute for Economic Policy
Research (SIEPR) and The Wayne and Jodi Cooperman Professor of Economics at Stanford
University. He received his Ph.D. in economics from Harvard University in 1999. He
is also a research associate at the National Bureau of Economic Research and serves
on the editorial board of the Journal of Policy Analysis and Management. Professor
Duggan's research focuses on the health care sector and also on the effects of government
expenditure programs such as Social Security, Medicare, and Medicaid on the behavior
of individuals and firms.
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