Predictors and consequences of participation in a social insurance program among private hospitals in Bangkok and vicinity: A strategic management perspective

The growth of the private hospital sector is one of the most striking phenomena of the health care system of Thailand. The number of private hospitals has been increasing rapidly along with competition among them. In 1991, a social insurance program was established as a part of the social security scheme of the country to provide health care coverage for the eligible population. This prepaid program has become a new market niche for private hospitals. However, only some have chosen to participate as main contractors to provide care for beneficiaries.;The first major objective of this study is to examine strategic environmental and organizational predictors of participation in the social insurance program among private hospitals in Bangkok and its vicinity area, using cross-sectional data collected in 1995. Logistic regression model are used to form predictor models. The second objective is to explore financial consequences the participation may have on hospital profitability and liquidity, using retrospective panel data from 1994 and 1995. A random effects model is applied as a major analytic approach.;Significant predictors of the hospitals' participating in the social insurance program include environment-market conditions of the hospitals (environmental complexity in particular), cost leadership strategy, size, management perceptions regarding the social insurance program, and prior profitability. The prior performance is also the effect modifier of management perceptions.;Participating hospitals had higher adjusted levels of profitability than non-participating hospitals. Despite no direct effect of participation on the level of hospital Liquidity demonstrated, its interaction with environmental dynamism was significant. However, the participation had no significant effect on the change in hospital performance over the time period studied.;The results suggest that adoption of the participation strategy by the private hospitals is influenced by internal demand within the hospitals, consistency and feasibility of the strategy given organizational characteristics, and external forces from the environment. Moreover, participation in the social insurance program has favorable effect on hospital performance, which may be attributed to strategy-environment match or the profit potential of the social insurance market in the early years, or both. The findings have several policy, management and health systems research implications.