The Quality and Efficiency of Public and Private Firms: Evidence from Ambulance Services

Abstract

Economic theory predicts that outsourcing public services to private firms reduces costs, but the effect on quality is ambiguous. We explore quality differences between publicly and privately owned ambulances in Stockholm County, Sweden, a setting where patients are as good as randomly assigned to ambulances with different ownership status. We find that private ambulances reduce costs and perform better on contracted measures such as response time, but perform worse on noncontracted measures such as mortality. In fact, a patient has a 1.4 percent higher risk of death within three years if a private ambulance is dispatched (in aggregate, 420 more deaths each year). We also present evidence of the mechanism at work, suggesting that private firms cut costs at the expense of ambulance staff quality.

Kepemilikan Ambulance Secara Perseorangan

“…2. Faktor eksternal, salah satu faktor yang mempengaruhi terjadinya pelanggaran aturan ambulans, terutama dilihat dari luar individu, dan faktor eksternal individu yang menyebabkan aturan hukum dilanggar (Adler et al, 2023;Knutsson & Tyrefors, 2022;Li et al, 2019;O'Cathain et al, 2018;Voitko et al, 2020). Pemilik ambulans listrik Kabupaten Bantul tidak boleh melanggar aturan hukum dengan cara apa pun.…”

How important are delays in treatment for health outcomes? The case of ambulance response time and cardiovascular events

“…However, an increasing body of research shows that the events which place immediately before admission to the hospital have a sizable effect on health outcomes. For instance, Knutsson and Tyrefors (2022) show that a randomly chosen patient has a 1.4% higher risk of death within 3 years if a private ambulance is dispatched versus a public ambulance; Brachet et al. (2012) report a 1.35% increase in 1‐year mortality for patients treated toward the end of a paramedic's longer shift; Jena et al.…”

Assessing the quality of public services: For‐profits, chains, and concentration in the hospital market

“…Our findings relate to a recent literature that has started to document large adverse effects of outsourcing to private firms on the provision of quality. In the healthcare context, Knutsson and Tyrefors (2022) show that quasi-random assignment to private ambulances is associated with lower quality. Gupta et al (2021) show that the recent rise in private-equity owners of nursing homes results in lower quality.…”