Empirical studies on operation costs and financial performances of dialysis service providers in Taiwan
Date Issued
2011
Date
2011
Author(s)
Cho, Chia-Ching
Abstract
The main purpose of the dissertation is to discuss operation costs and financial performances of dialysis service providers in Taiwan from a management accounting perspective. There are two independent chapters in the study.
Chapter 1 (pp. 5-38) analyzes factors influencing dialysis costs (i.e., cost drivers) using administrative data obtained from a large renal clinic chain in Taiwan. We use multiple linear regression analysis to examine factors that influence costs of dialysis. Specifically, the cost under investigation is total variable costs for medical treatments. We examine how cost drivers related to managerial incentives affect medical costs in dialysis by controlling for factors associated with medical treatments, patient characteristics and medical qualities. Our results indicate that treatment costs of dialysis are influenced by managerial factors such as capacity utilization rate, physicians’ shares holding rate, and location of clinics. Consistent with prior literature, cost drivers associated with medical treatments and patient characteristics also affect the medical variable costs. The findings help renal clinics identify areas important to cost control. In addition, our refined cost analysis help clinic better understand profitability resulting from differences in patient profiles. Finally, our findings suggest that health regulators should be cautious about that the dialysis providers may tend to reject costly patients and should establish appropriate monitoring mechanisms accordingly.
Chapter 2 (pp. 39-80) investigates the relationship between health service quality and financial performances of dialysis providers (i.e. renal clinics) to help dialysis providers clarify how quality drives profitability under Taiwan’s National Health Insurance. In our analysis, we employ two types of quality measures, i.e., subjective (four factors of patient satisfaction which are collected by questionnaires) and objective (three biochemical examinations) indicators. Data provided by the sample company consist of 492 patients from 10 different clinics. We use the regression analysis to examine how quality factors influence financial performance of the dialysis clinics by also controlling for other relevant variables. Our results indicate that only subjective measures are positively related to profits while objective measures are not. Thus, renal clinics may not have incentives to invest in clinical quality that bears no financial returns. Concerning financial management, the chain company should focus on patient satisfaction supervision and related administrative supports. In particular, satisfaction over the professional ability of physicians is the most critical quality factor relating to profits.
Subjects
dialysis
cost drivers
Taiwan National Health Insurance
dialysis clinic
health service quality
financial performance
Type
thesis
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