The study examined whether hospital mortality rates have improved since National Health Insurance (NHI) in Taiwan and what factors affect the hospital mortality rates. The related hospital data were collected from databases belonging to the NHI Annual Statistics Information. In addition, panel data analysis and stepwise regression are used to indicate the determinants of hospital mortality rates from 1995 to 2008. The evidence shows that mortality rates have not improved since the NHI; competition, the elderly, family income, the poor, the number of clinical departments, length of stay, new technology, public hospitals and family medical expenses—all affect mortality rates. Moreover, longer length of stay, increase in the number of elderly and low-income families, and inequality of resource allocation have led to high mortality rates. Policy makers first have to realize what drives them to change and then set the benchmarks for their improvement.