Objective: To examine the effect of participating in Taiwan Quality Indicator Project (TQIP) on hospital
effi ciency and investigate why hospitals participate in TQIP.
Methods: Our sample consists of 417 private not-for-profi t hospitals in Taiwan during the 2001–2007
period. A simultaneous-equation model was performed to examine if hospitals that participated in TQIP
were more effi cient than hospitals that did not and investigate which variables affected the probabilities
of hospitals’ participation in the project.
Results: Our fi ndings indicate that participating hospitals are more effi cient than hospitals not participating
in TQIP. In addition, hospital effi ciency, hospital size, teaching status, and hospital age are positively
related to participation in the project. These empirical results can be used as supporting evidence
of success in improving performance through creating quality for hospitals that have participated in the
project and offer insights into the value and strengths of the project. In addition, in recent years, reimbursement
systems worldwide have partly moved payment methods to a pay-for-performance mechanism.
In an attempt to control costs and improve quality, the policy makers should consider participating
in Quality Indicator Project (QIP) as being one of the criteria to be reimbursed for performance.
Key words: Taiwan Quality Indicator Project (TQIP), hospital performance, quality
