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Health Care Payment Incentives: A Comparative Analysis of Reforms in Taiwan, Korea and China

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  • Karen Eggleston
  • Chee-Ruey Hsieh

Abstract

Payment incentives have significant consequences for the equity and efficiency of a health care system, and have recently come to the fore in health policy reforms. This paper first discusses the economic rationale for apparent international convergence toward payment systems with mixed demand and supplyside cost sharing. We then summarize the recent payment reforms undertaken in Taiwan, Korea and China. Available evidence clearly indicates that incentives matter, and that supply-side cost sharing in particular can improve efficiency without undermining equity. Further study and monitoring of quality and selection is warranted.

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Bibliographic Info

Paper provided by Department of Economics, Tufts University in its series Discussion Papers Series, Department of Economics, Tufts University with number 0402.

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Date of creation: 2004
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Handle: RePEc:tuf:tuftec:0402

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  1. Djankov, Simeon & Murrell, Peter, 2002. "Enterprise Restructuring in Transition: A Quantitative Survey," CEPR Discussion Papers 3319, C.E.P.R. Discussion Papers.
  2. Winnie Yip & Karen Eggleston, 2001. "Provider payment reform in China: the case of hospital reimbursement in Hainan province," Health Economics, John Wiley & Sons, Ltd., vol. 10(4), pages 325-339.
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  5. Liu, Yuanli & Hsiao, William C. & Eggleston, Karen, 1999. "Equity in health and health care: the Chinese experience," Social Science & Medicine, Elsevier, vol. 49(10), pages 1349-1356, November.
  6. Pope, Gregory C., 1990. "Using hospital-specific costs to improve the fairness of prospective reimbursement," Journal of Health Economics, Elsevier, vol. 9(3), pages 237-251, November.
  7. Ma, Ching-to Albert, 1994. "Health Care Payment Systems: Cost and Quality Incentives," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 93-112, Spring.
  8. Yip, Winnie & Eggleston, Karen, 2004. "Addressing government and market failures with payment incentives: Hospital reimbursement reform in Hainan, China," Social Science & Medicine, Elsevier, vol. 58(2), pages 267-277, January.
  9. Randall P. Ellis & Thomas G. McGuire, 1993. "Supply-Side and Demand-Side Cost Sharing in Health Care," Journal of Economic Perspectives, American Economic Association, vol. 7(4), pages 135-151, Fall.
  10. Zeckhauser, Richard, 1970. "Medical insurance: A case study of the tradeoff between risk spreading and appropriate incentives," Journal of Economic Theory, Elsevier, vol. 2(1), pages 10-26, March.
  11. Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 3-21, Summer.
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Cited by:
  1. Karen Eggleston & Keqin Rao & Jian Wang, 2005. "From Plan to Market in the Health Sector? China's Experience," Discussion Papers Series, Department of Economics, Tufts University 0501, Department of Economics, Tufts University.

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