Objectives: To investigate the effects of psychiatric market competition and other factors on acute psychiatric inpatients in Taiwan. Methods: The data (with scrambled IDs) of the inpatients from 2001 was derived from the National Health Insurance database. The primary diagnosis code numbers of ICD-9-CM were between 290 and 319. The market area of psychiatric service was based on city or county, and the Herfindahl-Hirschman Indexes were based on the amount of acute inpatient cost and the length of stay. These indexes were used to represent the degree of the competitive psychiatric market. Results: 53.89% of acute inpatients fall into areas with a highly competitive psychiatric market. Patients located in the area of a highly competitive psychiatric market had a higher cost per case and cost per diem as well as a higher rate of 14 & 30 days readmission, however, length of stay was shorter than of medium level competitive market (p＜0.05). Regarding the ownership of hospitals where patients were admitted, although the inpatient cost per case, cost per diem, and length of stay in private hospitals were all lower than in public hospitals, 14 & 30 days readmission were actually higher than in public hospitals (p＜0.05). The inpatient cost per case, cost per diem and length of stay in medical centers were higher than in regional and district hospitals (p＜0.05). Nevertheless the 14 & 30 days readmission of patients in medical centers was lower than in regional and district hospitals. The inpatient cost per case, cost per diem and length of stay at psychiatric hospitals was higher than general hospitals with psychiatric sections, but had lower 30 days readmission rates (p＜0.05). On the size of hospitals, the inpatient cost was higher, length of stay was shorter, and 14 & 30 days readmission were higher in larger sized hospitals than in smaller sized hospitals. Conclusions: There is non-price competition in the psychiatry market. The government should pay attention to the market of acute bed care in order to reduce readmission rate. This is especially the case for hospitals in areas with a highly competitive psychiatric market.