Hospital Competition and Prescribing Behavior -Evidence from Oral Hypoglycemic Agents for Ambulatory Care in Taiwan

This study empirically analyzes the effect of hospital competition on prescribing behaviors of oral hypoglycemic agents (OHAs) for ambulatory care in a market setting where hospitals are classified into three levels according to Taiwan' s accreditation system. Without distinguishing the types of market structures and hospital levels, there might be no significant relationship between hospital competition and prescribing behaviors. However, we could not exclude the effects of other potential factors that are hard to quantify, such as the launch time of new OHAs or prescribing habits of physicians, on this relationship. Furthermore, the relationship between competition and prescribing behavior may differ among hospitals at various levels under each type of market structures. Our findings suggest market mechanism may improve the prescribing quality of regional and district hospitals under the market structure composed of three level hospitals. Effective medical information circulation policy should be reinforced to enhance the cognition of prescribing quality by the public, which may lead market mechanism to bring a positive effect on hospital industry.