Quality of care rather than price is the main concern in health care. However, does price not matter at all? To investigate what quality and cost factors influence whether patients perceive health care services as expensive and will recommend a hospital to other patients, the authors analyzed data from a national survey of patients in Taiwan in 2002. A total of 6725 subjects returned questionnaires. Results from logistic regression models showed that (1) a patient's perception of expense was determined simultaneously with the perceived quality and the out-of-pocket price of care, (2) a patient's perception of hospital quality appeared to be the most important determinant for recommending a hospital, and(3) while the out-of-pocket price did not affect a patient's recommendation, the perceived expense of the services did. The perceived value rather than the price itself-is the essence of quality competition in Taiwan's health care market.