Hospital competition and patient-perceived quality of care: Evidence from a single-payer system in Taiwan

Abstract

Objectives: To examine the effects of market competition on patient-perceived quality of care under a single-payer system in Taiwan.

Methods: Data came from two nationwide surveys conducted on discharged patients and National Health Insurance (NHI) hospital claim datasets in 2002 and 2004. Competition was measured by the Herfindahl-Hirschman Index (HHI). Quality of care was measured by patient-rated hospital performance including interpersonal skills and clinical competence domains. We used the instrumental variable approach to address the endogeneity between competition and patient-perceived quality of care.

Results: The results showed that HHI was significantly associated with a decrease in the perceived interpersonal skills (coefficient of -0.460; p<0.001), indicating that the interpersonal skill level increases in competition. A similar association was found for the perceived clinical competence (coefficient of -0.457; p=0.001).

Conclusion: Quality of care from the patients' perspective is sensitive to the degree of competition. By using patient-reported data, this study provides new evidence concerning competition and quality of care.