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KMID : 0926620230280010037
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Korean Journal of Hospital Management
2023 Volume.28 No. 1 p.37 ~ p.51
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Relationship of Hospital Ownership and Profitability with Prices of Non-Covered Services
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Kim Do-Hee
Kim Tae-Hyun
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Abstract
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Purposes: There exist many non-covered services that the National Health Insurance does not cover, and thus, their prices are set by individual health care providers. However, little study has been done to investigate how hospitals set prices for those services. The purpose of this study is to examine the relationship between ownership, profitability, and prices of those services for a sample of general hospitals.
Methodology/Approach: Data regarding the prices of major non-covered services (e.g., upper-level hospital room fees, MRI, Da Vinci robot surgery, and LASIK) were obtained from the Health Insurance Review and Assessment Service and the financial information, as well as other characteristics, were derived from the financial reports from the Korea Health Industry Development Institute. Descriptive statistics, t-tests, and multiple linear regression analyses were used to test the relationship between the independent variables and the dependent variables.
Findings: Hospitals owned by private universities appeared to have higher prices for non-covered services while regional public hospitals tend to have lower prices. Profitability, measured by operating margin, was not significantly related to the prices. Hospitals that charge higher prices were more likely to be located in the capital area (Seoul, Incheon, and Gyeonggi), and to employ larger number of personnel.
Practical Implications: Public hospitals tend to charge lower prices for non-covered services. Relative market power appears to be related to pricing. Further research is needed to investigate whether such a relationship varies over time and its effects on the quality and access.
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KEYWORD
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non-covered services, price, ownership, profitability
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