Factors Affecting the Closure of Hospital in Taiwan

[[abstract]]This study aims to discuss the characteristics and the factors of those hospitals closing out in Taiwan between 1994 - 2006. During past decades, the medical environment in Taiwan was severely impacted by several aspects. Due to the implement of new Medical Law, National Health Insurance as well as the influence of the society environment, economic deterioration and the awakening to the consumer?s rights, hospitals were facing an unprecedented challenge on operating their business. From 1994-2006, the total number of hospitals decreased by 27.3% from 719 to 523 in Taiwan. There were 413 hospitals closed and 207 new hospitals opened. This study analyzed the characteristics and the factors influencing those hospitals closing out by investigational questionnaires. The major reasons of closing are: (1) most closed hospitals are small size less then 50 beds; (2) the major factors affecting the closure of hospitals include small economic scale, high operating cost, and inefficient management. Additionally, they face with regulation of national health insurance: the small district closed hospital could not meet the standard of medical staff and facilities requirement of hospital and hospital accreditation. Patients can free choice medical organization to get care, the amount of patients that visited small district hospitals, become less and less. According to the payment mechanisms of national health insurance, the small district hospital is likely closed under the condition of unstable financial status; (3) the controversial issue on inheritance of small private district hospitals is also one of the major factors resulting in the closure. Conclusion: National Health Insurance policy is major factor, but not only one factor causing the closure of the hospitals. There are also some indirect impacts due to the implementation of new policy and the change of society environment. Key words?Hospital Closure, National Health Insurance, Small Hospital