The illusory truth effect is a psychological phenomenon describing the tendency to believe false information to be correct after repeated exposure.
One example I can think of in Slovakia is the statement about “cherry-picking” in the hospital sector. Lower-tier hospitals—here it is often implied that private hospitals in particular—cherry-pick the easy and profitable patients and send the rest to the larger state hospitals, which then make economic losses on them.
The argument sounds plausible, but there is one problem with it. No one has tried to prove it in years. Either on macro data or at least on real case studies. We have only had anecdotes spread by politicians and sometimes not even that.
Until recently. In the last few months, the debate has finally started to work with data. The ball was kicked by doctor unions in December. As the Health Care Surveillance Authority (HCSA), for example, has pointed out, it was more of an attempt at error-ridden analysis. In its response, the HCSA promised its own analysis of hospitals’ effective base rates (payment per standardized patient from public health insurance).
Indeed, HCSA did deliver its analysis earlier this February, although it has not promoted it in the media – one can guess why! Their results most certainly do not imply that small and/or private hospitals are universally better paid than large state hospitals.
State, Public, and Private
An analysis of the financial efficiency of hospitals was also prepared by INESS a few months ago. The analysis included a sample of 55 general hospitals and 301 data observations from the period 2017-2022. We looked at profitability (using return on assets and profit margin) and operating costs. Hospitals were divided into private and public; in a more detailed analysis, public hospitals were further divided into state-owned and non-governmental public hospitals (city, regional).
The results of the main analysis showed that private ownership reduces operating costs by 20% compared to public ownership. A deeper analysis showed that the inefficiency of public hospitals is mainly due to state-owned hospitals. Regional ownership reduces operating costs by 34% and private ownership by 41% compared to state ownership. Thus, the type of ownership positively influences cost efficiency in favor of private and regional hospitals compared to state-owned hospitals.
Both the work of the HCSA and our work suggests that state-owned hospitals do not have a revenue disadvantage (as claimed by politicians) and, conversely, have a cost disadvantage – they treat standardized patients more expensively. The direction for further investigation is clear. There is a governmental promise to run a broad efficiency audit in 2025, which may bring more light to the problem. However, it may point to an obvious conclusion – to reduce state ownership in hospitals. I am not sure if the government is ready to accept such a conclusion.
Continue exploring:
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