THE QUALITY AND EFFICIENCY OF PUBLIC AND PRIVATE FIRMS: EVIDENCE

Summary

In contrast to the scenario found in much of the literature, our setting offers an advantage in that the provider type is chosen independently of the patients’ characteristics and without concern for the patients’ provider preferences.4 Our first set of results relates to firm-specific ambulance outcomes of each patient serviced. [...] In relation to the total cost of the ground-based ambulance services in Stockholm, a conservative estimate puts the annual loss of QALYs at 50% of the total annual cost and exceeds considerably the cost savings from outsourcing ambulances to private firms in Stockholm. [...] When we reduce the size of the geographical unit in which we compare patients, the probability of a patient being assigned a private ambulance essentially converges to a constant, and the assignment of ambulances in terms of ownership status should not be related to patient health. [...] In the Online Appendix, Table A1 shows the descriptive statistics for the predetermined variables of the data used in the analysis. [...] The aim of the next section is to understand the underlying mechanism of why private ambulances underperform in terms of quality in both the short and long run.