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

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.