Hospital ownership and performance: Evidence from stroke and cardiac treatment in Taiwan

This paper compares program expenditure and treatment quality of stroke and cardiac patients between 1997 and 2000 across hospitals of various ownership types in Taiwan. Because Taiwan implemented national health insurance in 1995, the analysis is immune from problems arising from the complex setting of the U.S. health care market, such as segmentation of insurance status or multiple payers. Because patients may select admitted hospitals based on their observed and unobserved characteristics, we employ instrument variable (IV) estimation to account for the endogeneity of ownership status. Results of IV estimation find that patients admitted to non-profit hospitals receive better quality care, either measured by 1- or 12-month mortality rates. In terms of treatment expenditure, our results indicate no difference between non-profits and for-profits index admission expenditures, and at most 10% higher long-term expenditure for patients admitted to non-profits than to for-profits.