Total knee arthroplasty (TKA) is a common and effective surgical procedure for severe knee arthritis and is one of the most increasingly popular procedures in developed countries. In 2011, the Korean Government designated hospitals that had been focusing on specific diseases or procedures as specialty hospitals. The aim of this study was to compare outcomes of TKA specialty hospitals and non-specialty hospitals. Observational data collected from the National Health Insurance Claims Data of the Health Insurance Review and Assessment Service included 36,934 patients who underwent primary TKA at hospitals during 2012. Outcomes of TKA were unplanned readmission and adverse events. Age, sex, health insurance status, and comorbidity using Charlson’s Index were used to adjust for covariates. A generalized estimating equation (GEE) was used to compare outcomes of specialty hospitals and non-specialty hospitals. The unplanned readmission rates within 30 days of discharge of specialty and non-specialty hospitals were 12.1% and 10.1%, respectively. Patients who underwent TKA in specialty hospitals experienced fewer adverse events within 90 days of surgery compared to those who underwent the procedure in non-specialty hospitals (1.3% vs. 1.9%). However, the outcomes were not significantly different after adjusting for covariates. Further studies are needed to determine whether the outcomes of specialty hospitals become better than those of non-specialty hospitals in order to examine the effect of the designation policy.