The impact of publicness on the performance of professional services: Do private sector organizations perform better?

Abstract

This research assesses the impact of the degree of publicness on hospital performance in a specific ’mixed market’ of public health. This market is characterized by patient choice, capitation financing for private hospitals, and funding through ‘soft’ budgets (public authorities partially cover deficits or appropriate profits) for public hospitals. Previous studies on ownership (economic theory), market logic (on choice), and welfare orientation (role of professionals) offer inconclusive results as to the differences of performance among hospitals with different degree of publicness. We contrast statistics related to several dimensions of efficiency and survey data on different aspects of patient satisfaction. Logistic regression models demonstrate that a higher degree of publicness is correlated with a lower degree of perceived quality. However, hospitals with a varying degree of publicness are similarly efficient. These results indicate that divergences of performance differ amongst performance dimensions and the theoretical expectations need to consider differently these dimensions. Comparisons of the performance of hospitals with a varying degree of publicness should consider the broader institutional (i.e. market mix) configuration and the specific constraints of political authority for all hospitals, and not just single organizations. Finally, professionalism may play a role in explaining variations or similarities of performance by levelling out the differences in the degree of publicness.