Background: Over the last few decades, because hospitals in South Korea also have undergone dramatic changes, Korean hospitals traditionally have provided specialized health care services in the health care market. Inner Herfindahl-Hirschman Index (IHI) measures hospital caseloads based on patient proportions, independent of patient volumes. However, IHI that rely solely on patient proportions might be problematic for larger hospitals that provide a high number of diagnosis categories, as the patient proportions in each category are naturally relatively smaller in such hospitals. Therefore, recently developed novel measure, category medical specialization (CMS) is based on patient volumes as well as patient proportions. Methods: We examine the distribution of hospital specialization score by hospital size and investigate association between each hospital specialization and length of stay per case and hospital cost per case using Korean National Health Insurance Service-cohort sample data from 2002 to 2013. Results: Our results show that IHI show a decreasing trend according to the number of beds and hospital type but CMS show an increasing trend according to the number of beds and hospital type. Further, inpatients admitted at hospitals with higher IHI and CMS had a shorter length of stay per case (IHI: B=-0.104, p<0.0001; CMS: B=-0.044, p=0.001) and inpatients admitted at hospitals with higher IHI and CMS had a shorter hospital cost per case (IHI: B=-0.110, p=0.002; CMS: B=-0.118, p=<0.0001). Conclusion: This study may help hospital policymakers and hospital administrators to understand the effects of hospital specialization strategy on hospital performance under recent changes in the Korean health care environment.