The Market for Healthcare Services: An Empirical Analysis

• Applicant: Professor Dr. Thomas K. Bauer
• Subject Area: Statistics and Econometrics ; Empirical Social Research ; Public Health, Healthcare Research, Social and Occupational Medicine
• Term: from 2013 to 2016
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 232353398

The market for health care is one of the strongest growing markets in Germany. Between 1999 and 2009 the number of persons in need for long-term health care has risen by 16% and the number of stationary nursing facilities by about 31%. In 2009 the share of health care services reached 11% of the entire health market. Despite the increasing social and economic role of health care, the existing knowledge about the functionality of the health care market is limited. Against this background the research project aims to contribute to the existing empirical evidence concerning the demand for and supply of health care services. The results of the project may help improve the services for persons in need of long-term health care and to uncover potential inefficiencies in the nursing market. Hence, the project is also relevant with regard to health and social policy. The scientific analysis of the proposed research project occurs within three working packages. The first package focuses on the demand for health care services. The following questions are at the centre of interest: Which factors determine the demand for certain health care services? To what extent does the price, the available information about the quality of the services as well as the distance to the nursing facility affect the demand for a certain stationary nursing facility? The results of this working package permit an evaluation of the future demand of ambulant and stationary nursing as well as the regional need for stationary nursing facilities. The second working package focuses on the supply side of the nursing market, concentrating on potential differences in the quality of ambulant and stationary nursing services. The aim of this package is to deliver quantitative evidence on potential inefficiencies of the nursing sector in terms of, e.g., inappropriate medication. Finally, the third working package investigates the competitive situation in the market for stationary nursing services. Because the price on this market is regulated, it will be analyzed whether and to what extend competition on this market occurs via service quality. Furthermore, this package will focus on the relationship between the price and the quality of the health care services. The empirical analysis of the proposed research project will predominantly use an extensive panel data set, sampled out of the process data of more than 7.2 million persons of the Techniker Krankenkasse. The project will further use the nursing statistic of the German statistical office as well as quality data provided by the Medizinischer Dienst der Krankenversicherung (MDK). The project will concentrate on empirical methods that allow the identification of causal relationships.

• DFG Programme: Research Grants