Does the Provision of High-Technology Health Services Change After the Privatization of Public Hospitals?

Zo Ramamonjiarivelo, Texas State University
Ferhat Zengul, The University of Alabama at Birmingham
Josué Epané, University of Nevada, Las Vegas
Larry Hearld, The University of Alabama at Birmingham
Luceta McRoy, LCMJ Consulting
Robert Weech-Maldonado, The University of Alabama at Birmingham


Background: Public hospitals hold a key role in providing health care services especially to individuals without health insurance, those who are partially covered by health insurance, and low income population. However, some of these hospitals have converted to private status. The objective of this study was to assess the effect of the ownership conversion of public hospitals into private status on the provision of high-technology health services. Methods: This study used a non-experimental longitudinal design based on merged secondary data from the American Hospital Association annual survey, the Area Health Resources File, and the Local Area Unemployment Statistics [1997–2013]. The dependent variable “high-technology health services” was measured using Saidin index. There were 492 non-federal acute care public hospitals (n=8,335 hospital-year observations) in our sample, of which 104 (21%) converted to private status (75 converted to private not-for-profit and 29 converted to for-profit hospitals). The independent variable “privatization” referred to ownership conversion from public to either private not-for-profit or private for-profit status. We ran two fixed-effects linear regressions to measure the impact of privatization on high-technology services offering. Results: Our key findings suggested that privatization was associated with a decrease in Saidin index (β=−0.74; P=0.016; 95% CI: −1.34 to −1.38). For-profit privatization was associated with a greater decrease in Saidin index (β=−1.29; P=0.024; 95% CI: −2.41 to −0.17), compared with an insignificant decrease for not-for-profit privatization (β=−0.56; P=0.106; 95% CI: −1.25 to 0.12). Conclusions: Given the excessive cost of high-technology health services and the change in the hospitals’ mission after privatization, privatized hospitals tend to reduce the number of high-technology health services they provide.