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International Journal for Quality in Health Care Advance Access originally published online on June 28, 2005
International Journal for Quality in Health Care 2005 17(5):421-426; doi:10.1093/intqhc/mzi055
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International Journal for Quality in Health Care vol. 17 no. 5 © The Author 2005. Published by Oxford University Press on behalf of International Society for Quality in Health Care; all rights reserved

The effect of changing reimbursement policies on quality of in-patient care, from fee-for-service to prospective payment

Yi-Wen Tsai1,3, Yi-Chou Chuang2, Weng-Foung Huang3, Lai-Chu See2, Chung-Lin Yang1 and Pei-Fen Chen1

1 National Health Research Institutes, Division of Health Policy Research, Miaoli, Taiwan, 2 Chang-Gung University, Tao-Yuan, Taiwan, 3 National Yang-Ming University, Taipei, Taiwan

Objective. Using insurance claims for hemorrhoidectomies, we examined the effect of Taiwan’s Bureau of National Health Insurance’s case payment system, a fixed case payment rate method used to reimburse health care providers for in-patient care.

Design. This observational natural experimental study examined changes in medical care that occurred between two phases: the 9 months before case payment system was implemented on 1 October 1997 and the 9 months afterwards. The changes were analyzed by performing linear regressions with interaction between hospital type and the implementation of case payment system.

Setting. This study was based on total claim data from National Health Insurance.

Study participants. A total of 23 638 hemorrhoidectomy insurance claims.

Main outcome measures. Length of stay, number of medical services, and number of drug prescriptions. Medical services were stratified into those that were considered minimal requirements and those considered optional by the Bureau of National Health Insurance.

Results. Over the 18-month period, the number of patients increased by 23.7%. After the case payment system was implemented, length of stay decreased by 0.59 days (P < 0.0001), the number of minimally required services increased by 2.19 to 4.24 items (P < 0.0001), the number of optional service items decreased by 0.32 items (P < 0.0001), and drug prescription decreased slightly by 0.58 to 0.99 items (P < 0.0001) per hospitalization.

Conclusions. The case payment system successfully shortened length of stay without significantly sacrificing the provision of services.

Keywords: case payment, drug prescription, moral hazard, national health insurance, Taiwan

Address reprint requests to Yi-Wen Tsai, Ph.D. Associate Investigator, Division of Health Policy Research, National Health Research Institutes, no. 35, Keyan Road, Zhunan Town, Miaoli County 350, Taiwan. E-mail: ivytsai{at}nhri.org.tw

Accepted for publication April 1, 2005.


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