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The Relationship between Strategy and Hemodialysis Performance: The Moderating Role of Competitive
Intensity

resource dependence theory, and the dynamic competition perspective, this paper aims to
reexamine the relationship between strategy and performance in hemodialysis services.

2. Design/Methodology

The subjects of this study are hospitals that provided hemodialysis services and are
designated by the Ministry of Health and Welfare as regional and district hospitals in 2012

and 2013. We obtain 1,588 records (768 observations from 192 hospitals in 2012 and 820
observations from 205 hospitals in 2013) from the National Health Insurance Database
(National Health Insurance Administration, 2014a, 2014c). The strategies employed by the
hospitals are classified as vertical integration, cooperation, and outsourcing. Operational
performance is measured according to both efficiency and the quality of hemodialysis.

Efficiency is measured in terms of average number of beds per dialysis. Average quarterly
hemoglobin index is used as a proxy for health-care quality. The Herfindahl-Hirschman
Index (HHI) is used as a proxy for competitive intensity. We calculate the HHI values of
Taipei, northern Taiwan, central Taiwan, southern Taiwan, and Kaohsiung-Pingtung from

NHI database, but exclude the eastern Taiwan data because it is considerably smaller than
other listed regions. We also include the hospital evaluation level and the number of ne-
phrologists as control variables.

3. Findings

We use Analysis of Covariance (ANCOVA) to test our hypotheses. The empirical
results indicate that efficiency varied among hospitals employing different strategies (F

= 31.984, p < 0.001). The Scheffe test results indicate that the efficiency of hospitals
employing the equity collaboration strategy (13.397) is greater than that of hospitals
employing the vertical integration strategy (13.327). However, the difference in efficiency
between the hospitals adopting equity collaboration strategies and outsourcing strategies

(13.396) is insignificant. The ANCOVA results also reveal that the quality of health care
provided by hospitals adopting dissimilar strategies differ significantly (F = 8.133, p <
0.001). The quality of care provided by the hospitals employing outsourcing strategies
(10.880) is significantly greater than that of the hospitals employing vertical integration

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