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Productivity growth and quality changes of hospitals in Taiwan: does ownership matter?

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Abstract

As the competition in the Taiwanese medical industry becomes increasingly fierce, public hospitals are confronted with challenges in orientation and operations. This study measured changes in the operational efficiency of public and their competitors, non-public hospitals, in Taiwan. This study considered differences in technology and scale between public and non-public hospitals and adopted the quality-incorporating metafrontier Malmquist productivity index to analyze inputs, outputs, and quality achievements of hospitals. The data consisted of 40 public hospitals and 79 non-public hospitals in Taiwan during the period 2008–2014. This study measured productivity growth and quality changes. Moreover, it further identified technological gaps and quality gaps in different types of hospitals with respect to the metafrontier. At the same time, comparisons of changes in quality between public and non-public hospitals were also examined. The empirical results showed that public hospitals were better than non-public ones in terms of productivity. Meanwhile, it was also found that most of the decomposition in productivity was higher in public hospitals than in non-public ones, especially in terms of improvements in technology and quality. This paper presented public hospitals outperformed non-public ones during the research period in spite of the fact that private hospitals had become larger and group-oriented. Therefore, public hospitals and regulators made appropriate adjustments and responses in the face of the pressure of competition in the market.

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Notes

  1. In 2011, Ministry of Health and Welfare prosecuted that three state-owned hospitals in Keelung, Taipei and Taoyuan helped some enterprises win the bid of purchase of medical equipment through illegal bidding. In the case, a total fund worthy of NTD 640 million went to the enterprises. In 2014, there was a scandal that a state-owned hospital suffered a financial loss of NTD 4.81 million but distributed an allowance worthy of NTD 360 million without any specific criteria.

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Acknowledgements

This study was financially supported by the University System of Taipei Joint Research Program, Taiwan (USTP-NTOU-TMU-105-02).

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Authors and Affiliations

  1. Department of Health Care Management, National Taipei University of Nursing and Health Sciences, Taipei, Taiwan

    Kuan-Chen Chen

  2. Department of Applied Mathematics, Tunghai University, Taichung, Taiwan

    Hong-Ming Chen

  3. School of Health Care Administration, Taipei Medical University, 172-2 Keelung Rd., Sec. 2, Da’an Dist, Taipei City, 106, Taiwan

    Li-Nien Chien

  4. Department of Transportation Science, National Taiwan Ocean University Keelung, 2 Beining Rd., Jhongjheng District, Keelung City, 202, Taiwan

    Ming-Miin Yu

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  1. Kuan-Chen Chen
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  2. Hong-Ming Chen
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  3. Li-Nien Chien
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Correspondence to Li-Nien Chien or Ming-Miin Yu.

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Chen, KC., Chen, HM., Chien, LN. et al. Productivity growth and quality changes of hospitals in Taiwan: does ownership matter?. Health Care Manag Sci 22, 451–461 (2019). https://doi.org/10.1007/s10729-018-9465-3

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  • DOI: https://doi.org/10.1007/s10729-018-9465-3

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