Hsien-Ming Lien

Hospital ownership and performance: Evidence from stroke and cardiac treatment in Taiwan

This paper compares program expenditure and treatment quality of stroke and cardiac patients between 1997 and 2000 across hospitals of various ownership types in Taiwan. Because Taiwan implemented national health insurance in 1995, the analysis is immune from problems arising from the complex setting of the U.S. health care market, such as segmentation of insurance status or multiple payers. Because patients may select admitted hospitals based on their observed and unobserved characteristics, we employ instrument variable (IV) estimation to account for the endogeneity of ownership status. Results of IV estimation find that patients admitted to non-profit hospitals receive better quality care, either measured by 1- or 12-month mortality rates. In terms of treatment expenditure, our results indicate no difference between non-profits and for-profits index admission expenditures, and at most 10% higher long-term expenditure for patients admitted to non-profits than to for-profits.

Surgeon and Hospital Volume as Quality Indicators for CABG in Taiwan: Examining Hazard to Mortality and Accounting for Unobserved Heterogeneity

OBJECTIVE To investigate whether provider volume has an impact on the hazard of mortality for coronary artery bypass grafting (CABG) patients in Taiwan. DATA SOURCES/STUDY SETTING Multiple sources of linked data from the National Health Insurance Program in Taiwan. STUDY DESIGN The linked data were used to identify 27,463 patients who underwent CABG without concomitant angioplasty or valve procedures and the surgeon and hospital volumes. Generalized estimating equations and hazard models were estimated to assess the impact of volume on mortality. The hazard modeling technique used accounts for bias stemming from unobserved heterogeneity. PRINCIPAL FINDINGS Both surgeon and hospital volume quartiles are inversely related to the hazard of mortality after CABG. Patients whose surgeon is in the three higher volume quartiles have lower 1-, 3-, 6-, and 12-month mortality after CABG, while only those having their procedure performed at the highest quartile of volume hospitals have lower mortality outcomes. CONCLUSIONS Mortality outcomes are related to provider CABG volume in Taiwan. Unobserved heterogeneity is a concern in the volume-outcome relationship; after accounting for it, surgeon volume effects on short-term mortality are large. Using models controlling for unobserved heterogeneity and examining longer term mortality may still differentiate provider quality by volume.

Global budgets and provider incentives: hospitals' drug expenditures in Taiwan.

PURPOSE This chapter examines how drug prescribing behavior in Taiwanese hospitals changed after the government changed reimbursement systems. In 2002, Taiwan instituted a system in which hospitals are reimbursed for drug expenditures at full price from a fixed global budget before the remaining budget is allocated to reimburse all other expenditures, often at discounted prices. Providers are thus given a financial incentive to increase prescriptions. METHODOLOGY We isolate the effect of this system from that of other confounding factors by estimating a difference-in-difference model to analyze monthly drug expenditures of hospital departments for outpatients during the years 1999-2006. FINDINGS Our results suggest that hospital departments which use drugs more heavily as part of their regular medical care increased their drug prescription expenditures after the implementation of the global budget system. In addition, we find that the response was stronger among for-profit than not-for-profit and public hospitals. IMPLICATIONS Hospital doctors responded to the financial incentive created by the particular global budgeting system adopted in Taiwan by increasing expenditures on drug treatments for outpatients.

THE ROLE OF HOSPITAL COMPETITION ON TREATMENT EXPENDITURE AND OUTCOME: EVIDENCE FROM STROKE AND CARDIAC TREATMENT IN TAIWAN

This article examines whether market competition affects treatment expenditure and health outcomes of stroke and cardiac treatment in Taiwan. Our measure of treatment expenditure is the hospital expenditure paid at the index admission (short term) and the sum of inpatient and outpatient expenditures paid in the subsequent year (long term). Our measure of health outcome is the probability of death in 1 and 12 months after the hospital’s discharge. Our measure of competition follows the method developed by Kessler and McClellan that calculates the Herfindal index based on the predicted patient flows using exogenous variables (e.g., traveling distance to hospitals). Using data of patients hospitalized for new stroke and cardiac treatment between 1997 and 2001 in Taiwan, we find that an increase of market competition results in an insignificant impact on a patient’s mortality. In terms of treatment expenditure, our results indicate that hospitals facing more competition incur higher expenditures, either the short- or long-term expenditure. Finally, we find evidence showing that an increase of treatment expenditure at admission is due to a raise of length of stay and treatment intensity per day as well as the usage of expensive equipment. (JEL I11, L13, L41)

Hospital ownership and drug utilization under a global budget: a quantile regression analysis

BACKGROUND A global budgeting system helps control the growth of healthcare spending by setting expenditure ceilings. However, the hospital global budget implemented in Taiwan in 2002 included a special provision: drug expenditures are reimbursed at face value, while other expenditures are subject to discounting. That gives hospitals, particularly those that are for-profit, an incentive to increase drug expenditures in treating patients. METHODS We calculated monthly drug expenditures by hospital departments from January 1997 to June 2006, using a sample of 348 193 patient claims to Taiwan National Health Insurance. To allow for variation among responses by departments with differing reliance on drugs and among hospitals of different ownerships, we used quantile regression to identify the effect of the hospital global budget on drug expenditures. RESULTS Although drug expenditure increased in all hospital departments after the enactment of the hospital global budget, departments in for-profit hospitals that rely more heavily on drug treatments increased drug spending more, relative to public hospitals. CONCLUSIONS Our findings suggest that a global budgeting system with special reimbursement provisions for certain treatment categories may alter treatment decisions and may undermine cost-containment goals, particularly among for-profit hospitals.