Factors associated with strategic choices of hospitals in response to the global budget payment system

Objectives: Due to the continuous revolutions in the national health insurance payment system, the management of hospitals have been seeking a better strategy to cope with these changes. The purpose of this study was to explore the factors associated with strategic choices of hospitals in response to the global budget payment system. Methods: This study employed Shortell's model by dividing strategies into three types: institutional-level response, managerial-level response, and technical-level response. This cross-sectional study investigated 127 hospitals in Taiwan (including district teaching hospitals and higher levels) by sending them structured questionnaires. The response rate was 59.1% with 75 hospitals returning the questionnaires. Results: The results of the study indicated that in respect to institutional-level response to the global budget payment system, most hospitals adopted the strategy of further educating their staff about the major changes in the global budget payment system. In regard to managerial-level response, the majority of hospitals adopted the strategy of enhancing their financial management and constructing a better cost accounting system. Finally, for the technical-level response, most hospitals employed the strategy of establishing a referral system. The results of the study also showed that strategies at the institutional-level were influenced by hospital ownership and service volume following the implementation of the global budget payment system. Hospital level, degree of market competition, and change in operating income after the implementation of the global budget payment system were significant indicators of the strategies at the managerial-level that the hospitals would adopt. Conclusions: The results demonstrated that the characteristics of the hospital and degree of market competition were significant indicators of strategies that hospitals would adopt in response to the global budget payment system.