Competition and Cooperation of Hospitals: The Effects of Environment, Resource and Strategy on Performance

Abstract

This empirical study aims at examining how environmental uncertainty, resources, and competitive and cooperative strategies affect hospital performance. Hospital resources are measured by numbers of hospital beds, equipment and facilities, and specialist physicians. Ten items are used to measure competitive strategy, such as providing higher-quality and non-BNHI services, recruiting well-known doctors, emphasizing medical innovation, marketing, and cost-control. Another ten items are used to measure cooperative strategy as well, such as forming medical and non-medical alliances, participating in healthcare and medical associations, interacting with government authorities, and patient referral. The environmental uncertainties are measured by four items including regulatory changes from healthcare authorities, unpredictability of healthcare regulations and policies, environmental impacts from healthcare policies and from the Global Budget system. Hospital performance is measured by the number of inpatient admissions per doctor, infection rate, and occupancy rate. The researchers collected data by distributing questionnaires in 509 hospitals. Of these, 130 hospitals responded, demonstrating a valid response rate of 25.54%. Factor analysis and regression analysis were used to test the hypotheses. The empirical results show that (1) The more the hospital beds, the higher the number of inpatient admissions per doctor and occupancy rate; (2) Cost-control strategy leads to a higher number of inpatient admissions per doctor; and (3) Cooperating with government and associations results in better performance; (4) Environmental state uncertainty reinforces the positive correlation between innovation strategy and performance; whereas cost-control strategy leads to a higher infection rate; (5) Environmental uncertainty reinforces the positive correlation between cooperative strategy and performance. This study contributes to further exploration of insights into research issues in competitive and cooperative strategies. According to our empirical results, we propose several suggestions for healthcare practitioners to use to formulate and implement their strategies to create better performance.