Cost-containment measures of Taiwan, NHI

The National Health Insurance (NHI) Program in Taiwan is a mandatory government-run social insurance system which covers 99% of the population. Since its inception in 1995, NHI has been facing the challenges of rapid increase on health care costs, particularly in 1998; nominal growth rate of NHI costs reached 11.4% per year. Many strategies have been considered and introduced in controlling costs and in improving quality of care. Among them the Global Budget Payment System (GBPS) and the increase of co-payment were the most important reforms.

The GBPS is a prospective payment system which usually determines annual budget for a specific sector prospectively through negotiation. In 1998, dentistry was the first professional group to initiate the GBPS. Hospitals joined in at last in 2002. The NHI was able to reach a controlled health expenditure since then.

Besides the GBPS and co-payment adjustments, Taiwan has introduced a variety of cost containment strategies, including various price-regulations for drug and medical services, and case payment…etc.

Today, total NHI costs were controlled within a stable range. The nominal annual growth rates on per capita costs (budget) ranged 3.6- 4.2 % from 2002 to 2008. The GBPS has proved to be effective on cost control and on enhancing responsibility of the providers for self-management. Further, the unit of payment and other micro strategies such as quality-based payment system are introduced following global budget payment system to improve efficiency and quality of care.