Health care regulation and the operating efficiency of hospitals: Evidence from Taiwan Hsihui Chang a, * , Wen-Jing Chang b , Somnath Das c , Shu-Hsing Li d a Anderson Graduate School of Management, University of California at Riverside, Riverside, CA 92521, USA b School of Management, National Changhua University of Education, Changhua 500, Taiwan c College of Business Administration (MC: 006), University of Illinois at Chicago, Chicago, IL 60607, USA d College of Management, National Taiwan University, Taipei 106, Taiwan Abstract Using data from the Annual Survey of Hospitals compiled by the Department of Health in Taiwan for years 1994 through 1997, we employed Data Envelopment Anal- ysis (DEA) to evaluate the impact of a National Health Insurance (NHI) Program on the operating efficiency of district hospitals in Taiwan. We find that, on average, effi- ciency of district hospitals in Taiwan decreased following the implementation of the NHI Program. Our results are robust to the inclusion of control variables that have been shown to affect hospital operating performance in prior research, and alternative efficiency measurements. Ó 2004 Elsevier Inc. All rights reserved. 0278-4254/$ - see front matter Ó 2004 Elsevier Inc. All rights reserved. doi:10.1016/j.jaccpubpol.2004.10.004 * Corresponding author. Tel.: +1 951 827 4284; fax: +1 951 827 3970. E-mail address: hsihui.chang@ucr.edu (H. Chang). Journal of Accounting and Public Policy 23 (2004) 483–510 www.elsevier.com/locate/jaccpubpol