Long-term productivity in German hospital care

The provision of health care services varies among regions in Germany. In particular, the medical care supply in the hospital sector differs significantly between German states. Such differences can result from differences in demographics, the accessibility of providers or the morbidity of the population. But also varying hospital policies between the states may cause such disparities. In Germany, large parts of hospital policy are decentralized at the level of the 16 federal states. Thus, the states are responsible for hospital capacity planning. They autonomously decide on the extent, location and specialization of hospitals, departments and bed capacities. Furthermore, they have to fund capital costs for hospitals, and can therefore affect the capital stock of hospitals.

In the case of hospital production, labor inputs (doctors and nurses) and capital inputs (buildings, beds, equipment) translate into a single output (number of treated patients). Regional differences in inputs and output, but also in the substitution of inputs, can have an effect on the productivity of hospital services. This project aims to analyze total factor productivity (TFP) growth in hospital care. TFP growth captures changes in outputs that cannot be traced back to shifts in total inputs.

This project will analyze long-term TFP growth in hospital care from 1955 to 2015 at the level of German states. It will provide evidence for regional differences in productivity and which factors determine TFP growth in hospital care.

Researcher in charge
Adam Pilny

Adam Pilny


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