Prospective Payment System in Taiwan - An example for thyroidectomy cases

Background: After 1995, the average annual growth rate of healthcare expenditure was around 8% in earlier phase of National Health Insurance in Taiwan. To reduce the growth rate, we have completed the introduction of global budget scheme as a macro instrument for hospital and clinic reimbursements in 2002. Meanwhile, we also have introduced case payment as one of accompanying measures. It was expected to improve medical service efficiency with the implementation of case payment.

Objective: Case payment is a form of prospective payment system (PPS), which is a way to change hospital behavior through financial incentives and to encourage more cost-efficient management of healthcare. Fifty three items were put on case payment in Taiwan, which took up 11.6% of inpatient expenditure in 2007. In this study, our aim is to evaluate the effect of case payment through a cohort data before adopting another PPS (Taiwanese version of Diagnosis Related Groups, Tw-DRGs) in 2009.

Data source: The claim data were collected between 1999 and 2008 in Taiwan. There were 88,347 thyroidectomy surgery cases observed during this period.

Method: This is a retrospective population cohort study between 1999 and 2008, among patients who have undergone thyroidectomy surgery during this period. For individual-level analysis, multiple linear regression was used to estimate the medical fee, length of stay and average medical expense per day with controlled characteristics of medical institution (location, level and ownership) and demographic (gender and age) factors. The costs will be compared for those procedures on case payment versus those were not.

Result: The result reveals that length of stay and medical fee were decreasing substantially for case payment cases (4.82 vs. 3.75 days and NT$ 49,143 vs. NT$ 36,298 per case), but the average fee per day was not significantly (NT$ 11,293 vs. NT$ 11,243). We also observed that case payment system indeed offered different to change the flow path of medical care. For example, providers adopted clinical paths to reduce costs (room, nursing and so on.).