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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

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).

Suggested Citation

  • Hung, Jung-Hua & Chang, Li, 2008. "Has cost containment after the National Health Insurance system been successful: Determinants of Taiwan hospital costs," Health Policy, Elsevier, vol. 85(3), pages 321-335, March.
  • Handle: RePEc:eee:hepoli:v:85:y:2008:i:3:p:321-335
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    Cited by:

    1. 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.
    2. 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.
    3. Luiz Flavio Andrade & Thomas Rapp & Christine Sevilla-Dedieu, 2016. "Exploring the determinants of endocrinologist visits by patients with diabetes," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(9), pages 1173-1184, December.
    4. 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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