How do private hospitals respond when a public health system changes demand for, and prices paid to, publicly funded private care? We study Denmark between 2008 and 2010 using administrative records for 42 elective procedures. We exploit two institutional shocks: a paramedical strike in public hospitals, and a temporary suspension of the patient-choice payment scheme. Private hospitals adjust mainly through activity. The probability of treating publicly funded patients rises during the strike and falls by ten percentage points after the suspension. Conditional on being active, private providers raise visit volumes by 66% during the strike and treat 1.42 additional conditions. During the same period, the activity of private hospitals is increasing, and this trend accelerates with the shocks. Case-mix changes are modest, and we find no response in 30-day emergency readmissions.
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