Correlates of Perceived Competitive Advantage among Hospital Management: A Multilevel Analysis

Purpose: As the hospital industry continues to undergo significant change and becomes an increasingly competitive environment, the concept of competitive advantage has received a considerable degree of attention in the healthcare literature. Using a multilevel modeling approach, this study evaluated the contributions of hospital characteristics and market competition on perceived competitive advantage of hospital managers in Taiwan. Methods: Data for this study were mainly collected using a questionnaire that was mailed to the top executives of 432 accredited hospitals in Taiwan in 2009. Valid responses were obtained from182 hospitals for an effective response rate of 42.1%. Results: Respondents indicated relatively moderate assessment of perceived competitive advantage (mean = 3.5, standard deviation = 0.72, on a five-point Likert scale). There were no significant correlations between the group-level predictor (competition of local healthcare market) and the individual-level ones. Results of multilevel analysis to simultaneously examine the effects of individual-level (hospital characteristics; level 1) and group-level (competition of local healthcare market; level 2) predictors on perceived competitive advantage indicated that the predictors at hospital level had a statistically significant effect on respondents' perception of competitive advantage of their hospitals. Nonetheless, there was insignificant market competition variation in perceived competitive advantage among respondents. Conclusion: We conducted a multilevel analysis that reflected the hierarchical structure of our data, where hospitals were nested within healthcare markets of different intensities of competition. Our results join a body of healthcare literature suggesting that hospital level is a significant predictor of hospital performance. However, we found no evidence of a strong relationship between the degree of local market competition and perceived competitive advantage of respondents. Taken together, the results of our empirical study shed light on some interesting issues regarding competitive advantage.