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Has cost containment after the National Health Insurance system been successful: Determinants of Taiwan hospital costs

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  • Hung, Jung-Hua
  • Chang, Li
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    Abstract

    Taiwan implemented the National Health Insurance system (NHI) in 1995. After the NHI, the insurance coverage expanded and the quality of healthcare improved, however, the healthcare costs significantly escalated. The objective of this study is to determine what factors have direct impact on the increased costs after the NHI. Panel data analysis is used to investigate changes and factors affecting cost containment at Taipei municipal hospitals from 1990 to 2001. The results show that the expansion of insured healthcare coverage (especially to the elderly and the treatment of more complicated types of diseases), and the increased competition (requiring the growth of new technology and the longer average length of stay) are important driving forces behind the increase of hospital costs, directly influenced by the advent of the NHI. Therefore, policymakers should emphasize health prevention activities and disease management programs for the elderly to improve cost containment. In addition, hospital managers should find ways to improve the hospital efficiency (shorten the LOS) to reduce excess services and medical waste. They also need to better understand their market position and acquire suitable new-tech equipment earlier, to be a leader, not a follower. Finally, policymakers should establish related benchmark indices for what drivers up hospital costs (micro-aspect) and to control healthcare expenditures (macro-level).

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    Bibliographic Info

    Article provided by Elsevier in its journal Health Policy.

    Volume (Year): 85 (2008)
    Issue (Month): 3 (March)
    Pages: 321-335

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    Handle: RePEc:eee:hepoli:v:85:y:2008:i:3:p:321-335

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    Web page: http://www.elsevier.com/locate/healthpol

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    Cited by:
    1. Chiang, Yu-Mei & Chang, Yuhsuan, 2012. "Stress, depression, and intention to leave among nurses in different medical units: Implications for healthcare management/nursing practice," Health Policy, Elsevier, vol. 108(2), pages 149-157.
    2. Li Chang & Chi-Ping Hou, 2011. "Does a National Health Insurance System Enhance Quality of Care and Contain Cost?-An Empirical Investigation of the National Health Insurance System in Taiwan," Review of Economics & Finance, Better Advances Press, Canada, vol. 1, pages 32-42, November.
    3. Chang, Shyr-Juh & Hsiao, Hsing-Chin & Huang, Li-Hua & Chang, Hsihui, 2011. "Taiwan quality indicator project and hospital productivity growth," Omega, Elsevier, vol. 39(1), pages 14-22, January.

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