The Business Model in Taiwan s Specialist Hospitals from Transaction cost Perspectives By Wen-Chung Feng Advisor: Prof. Jau-Shin Hon A Thesis Submitted to Tunghai University in Partial Fulfillment of the Requirements for the Degree of Master of Business Administration July 2009 Taichung, Taiwan
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The Business Model of Taiwan s Specialist Hospitals from Transaction Cost Perspectives Student: Wen-Chung Feng Advisor: Prof. Jan-Shin Hon Department of Industrial Engineering and Enterprise Information Tunghai University ABSTRACT Under the fast changing environment of healthcare policies by National Health Insurance, Hospitals could not make profits by providing more healthcare services under the payment of fee for services like before. Especially, it is difficult for district hospitals to survive if they could not reduce the transaction costs and the agency costs between the patients, the Bureau of National Health Insurance, and the supplier merchant. Nowadays for the shortage of payoff system, the development of hospital has been limited. The traditional medical service is one doctor to one patient for one disease. The idea of health service has been changed to integrated health service. How do district hospitalssurvive in this circumstance? How do they change their business models in order to lower the transaction costs and promote the quality of service at the same time. District hospital must diversify their services to specialist practices, such as orthopedic specialist, cosmetic center, rehabilitation center, hemodialysis center and respiratory care center. We find the most common strategies employed to achieve win-win goal by vertical integration, strategic alliance and medical value chain management. This study presents three successful business models: orthopedic specialist hospitals, dental clinics and ophthalmology clinics. Even the small-medium size hospitals and clinics can create the best competition by providing specialist practices. Keywords: Business ModelValue Chain ManagementTransaction Cost II
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