Effect of participating in Taiwan Quality Indicator Project on hospital efficiency in Taiwan

To examine the effect of participating in Taiwan Quality Indicator Project (TQIP) on hospital efficiency and investigate why hospitals participate in TQIP.

Our sample consists of 417 private not-for-profit hospitals in Taiwan during the 2001-2007 period. A simultaneous-equation model was performed to examine if hospitals that participated in TQIP were more efficient than hospitals that did not and investigate which variables affected the probabilities of hospitals' participation in the project.

Our findings indicate that participating hospitals are more efficient than hospitals not participating in TQIP. In addition, hospital efficiency, hospital size, teaching status, and hospital age are positively related to participation in the project. These empirical results can be used as supporting evidence of success in improving performance through creating quality for hospitals that have participated in the project and offer insights into the value and strengths of the project. In addition, in recent years, reimbursement systems worldwide have partly moved payment methods to a pay-for-performance mechanism. In an attempt to control costs and improve quality, the policy makers should consider participating in Quality Indicator Project (QIP) as being one of the criteria to be reimbursed for performance.