This study intends to explore the impact of the customer knowledge integration capability, customer knowledge absorptive capability, customer knowledge creation capability, and customer relationship capability on new service development (NSD) performance for Taiwan's hospitals from customer knowledge and customer relationship perspectives. We employ the self-administered mail survey to collect research data and select self-pay medical service managers or top managers as key informants. After testing the fitness of sample representativeness, non-response error, common method variance, reliability, and validity, we adopt structure equation model to test the research model. Empirical results indicate the customer knowledge absorptive capability of a hospital is positively associated with NSD performance, and the customer knowledge integration capability of a hospital fully mediates the relationship between customer knowledge absorptive capability and NSD performance. However, customer relationship capability and customer knowledge absorptive capability both have positive influence on customer knowledge creation capability. Managerial and theoretical implications are discussed.