Working Paper No. 1365

Quality and Efficiency Between Public and Private Firms: Evidence From the Ambulance Services

Published: October 10, 2020Pages: 62Keywords: Public outsourcing; Pre-hospital care; Healthcare quality; HealthJEL-codes: D22; D44; H44; I11; L33; P48

Quality and Efficiency Between Public and Private Firms: Evidence From the Ambulance Services Daniel Knutsson and Björn Tyrefors


Economic theory predicts that outsourcing public services to private firms will reduce costs, but the effect on quality is ambiguous. We explore quality differences between publicly and privately owned ambulances in a setting where patients are as good as randomly assigned to ambulances of different ownership statuses.

We find that privately owned ambulances are better at responding to contracted quality measures but perform worse on noncontracted measures, such as mortality. In fact, a randomly allocated patient has a significantly higher risk of death if a private ambulance is dispatched. We also present suggestive evidence on the mechanism, supporting that private firms cost innovate at the expense of ambulance staff quality.


Reference:

Knutsson, Daniel and Björn Tyrefors (2020), "Quality and Efficiency Between Public and Private Firms: Evidence From the Ambulance Services". IFN Working Paper No. 1365. Stockholm: Research Institute of Industrial Economics (IFN).

Daniel Knutsson

Contact

Mob: +46 72 200 5998
daniel.knutsson@ifn.se

Björn Tyrefors

Contact

Ph: +46 8 665 4521
Mob: +46 704678003
bjorn.tyrefors@ifn.se

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