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The impact of global budgeting on treatment intensity and outcomes

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  • Kamhon Kan
  • Shu-Fen Li
  • Wei-Der Tsai

Abstract

This paper investigates the effects of global budgets on the amount of resources devoted to cardio-cerebrovascular disease patients by hospitals of different ownership types and these patients’ outcomes. Theoretical models predict that hospitals have financial incentives to increase the quantity of treatments applied to patients. This is especially true for for-profit hospitals. If that’s the case, it is important to examine whether the increase in treatment quantity is translated into better treatment outcomes. Our analyses take advantage of the National Health Insurance of Taiwan’s implementation of global budgets for hospitals in 2002. Our data come from the National Health Insurance’s claim records, covering the universe of hospitalized patients suffering acute myocardial infarction, ischemic heart disease, hemorrhagic stroke, and ischemic stroke. Regression analyses are carried out separately for government, private not-for-profit and for-profit hospitals. We find that for-profit hospitals and private not-for-profit hospitals did increase their treatment intensity for cardio-cerebrovascular disease patients after the 2002 implementation of global budgets. However, this was not accompanied by an improvement in these patients’ mortality rates. This reveals a waste of medical resources and implies that aggregate expenditure caps should be supplemented by other designs to prevent resources misallocation. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Kamhon Kan & Shu-Fen Li & Wei-Der Tsai, 2014. "The impact of global budgeting on treatment intensity and outcomes," International Journal of Health Economics and Management, Springer, vol. 14(4), pages 311-337, December.
    • Handle: RePEc:kap:ijhcfe:v:14:y:2014:i:4:p:311-337
    DOI: 10.1007/s10754-014-9150-0
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    Cited by:

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    2. Hung-pin Lai & Meng-Chi Tang, 2018. "Hospital efficiency under global budgeting: evidence from Taiwan," Empirical Economics, Springer, vol. 55(3), pages 937-963, November.
    3. András Kiss & Norbert Kiss & Balázs Váradi, 2023. "Do budget constraints limit access to health care? Evidence from PCI treatments in Hungary," International Journal of Health Economics and Management, Springer, vol. 23(2), pages 281-302, June.
    4. Lin, Lee-Kai, 2022. "Effects of a global budget payment scheme on medical specialty workforces," Social Science & Medicine, Elsevier, vol. 309(C).

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    More about this item

    Keywords

    Global budget; Treatment outcomes; AMI; Ischemic heart disease; Hemorrhagic stroke; Ischemic stroke; I10; I13; I18;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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