Management practices in hospitals: A public-private comparison

by Claudio Lucifora

We use information on management practices in 1,183 hospitals in 7 different countries, collected in 2010 within the “World Management Survey” initiative, to estimate the role of public ownership on different management dimensions, such as monitoring performance, setting targets and incentivizing employees. A significant variation in management practices both between countries and, within countries, across hospitals is found. We show that managers in public sector hospitals tend to underperform, relative to private hospitals, in all the countries considered. Larger hospitals appear to be better managed, while there is no difference between teaching and other type of hospitals. Publicly owned hospitals appear less efficient in the provision of incentive schemes to promote and reward highly motivated employees, or remove poor performers. Overall, public ownership is associated with a reduction of about 10% in management score, which corresponds approximately to a half-standard deviation.