‘Conversion factor’ in medical industry is fee for the unitized medical service. Conversion factor is multiplied by relative value of medical service, called RBRVS(Resource-Based Relative Value Scale), to determine the medical service charges. This research develops various estimation methodologies for conversion factors and applies them to Korean hospital cost data to determine sensitivities of methodologies, and to calculate the differences in conversion factors among different types of medical care institutions. Moreover, relationships between size of hospitals and their conversion factors estimated for individual medical care institutions are analyzed. According to our result, larger hospitals such as university hospitals show higher conversion factors as predicted. We also observed significant differences of conversion factors among different classes of institutions. This result indicates that current ‘adjustment factor’ used to adjust the cost structure differences among different classes of institutions does not fully reflect the actual cost structure differences among different classes of institutions. Our result also showed that even within the same type of medical institutions supposedly with same cost structure, large differences of conversion factors are observed indicating the efficiency differences among institutions.