IDEAS home Printed from https://ideas.repec.org/a/spr/empeco/v55y2018i3d10.1007_s00181-017-1317-3.html
   My bibliography  Save this article

Hospital efficiency under global budgeting: evidence from Taiwan

Author

Listed:
  • Hung-pin Lai

    (National Chung Cheng University)

  • Meng-Chi Tang

    (National Chung Cheng University)

Abstract

Global budgeting sets a predetermined cap to restrain health expenditure, but the fixed budget for medical providers could result in less efficient services. This paper measures hospital efficiency under global budgeting using simultaneous stochastic frontier analysis, stressing that physicians and dentists within a hospital were under separate budgets in Taiwan. Empirical results show that hospital efficiency was not improved after global budgeting, and physicians were found to be less efficient than dentists. The physicians and dentists within the same hospital were also found to be less integrated after global budgeting. Empirical results show that a joint analysis improves the estimation efficiency from separate analysis and suggest that the aggregate inefficiency came mostly from physicians in hospitals that were small, public, non-teaching, located in small markets and had a low market share. Except for public hospitals, physicians and dentists in the above hospitals were also found to be less integrated.

Suggested Citation

  • 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.
    • Handle: RePEc:spr:empeco:v:55:y:2018:i:3:d:10.1007_s00181-017-1317-3
    DOI: 10.1007/s00181-017-1317-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00181-017-1317-3
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00181-017-1317-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mougeot, Michel & Naegelen, Florence, 2005. "Hospital price regulation and expenditure cap policy," Journal of Health Economics, Elsevier, vol. 24(1), pages 55-72, January.
    2. Bradley Chen & Victoria Y. Fan, 2015. "Strategic Provider Behavior Under Global Budget Payment with Price Adjustment in Taiwan," Health Economics, John Wiley & Sons, Ltd., vol. 24(11), pages 1422-1436, November.
    3. Bruce Hollingsworth, 2008. "The measurement of efficiency and productivity of health care delivery," Health Economics, John Wiley & Sons, Ltd., vol. 17(10), pages 1107-1128, October.
    4. Hung-pin Lai & Cliff Huang, 2013. "Maximum likelihood estimation of seemingly unrelated stochastic frontier regressions," Journal of Productivity Analysis, Springer, vol. 40(1), pages 1-14, August.
    5. Yan, Yu-Hua & Hsu, Shuofen & Yang, Chen-Wei & Fang, Shih-Chieh, 2010. "Agency problems in hospitals participating in self-management project under global budget system in Taiwan," Health Policy, Elsevier, vol. 94(2), pages 135-143, February.
    6. Chang, Ray-E. & Hsieh, Chi-Jeng & Myrtle, Robert C., 2011. "The effect of outpatient dialysis global budget cap on healthcare utilization by end-stage renal disease patients," Social Science & Medicine, Elsevier, vol. 73(1), pages 153-159, July.
    7. U.‐G. Gerdtham & M. Löthgren & M. Tambour & C. Rehnberg, 1999. "Internal markets and health care efficiency: a multiple‐output stochastic frontier analysis," Health Economics, John Wiley & Sons, Ltd., vol. 8(2), pages 151-164, March.
    8. 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.
    9. Simar, Leopold & Wilson, Paul W., 2007. "Estimation and inference in two-stage, semi-parametric models of production processes," Journal of Econometrics, Elsevier, vol. 136(1), pages 31-64, January.
    10. Fan, Chinn-Ping & Chen, Kong-Pin & Kan, Kamhon, 1998. "The design of payment systems for physicians under global budget - an experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 34(2), pages 295-311, February.
    11. Hauck, Katharina & Street, Andrew, 2006. "Performance assessment in the context of multiple objectives: A multivariate multilevel analysis," Journal of Health Economics, Elsevier, vol. 25(6), pages 1029-1048, November.
    12. Kumbhakar,Subal C. & Wang,Hung-Jen & Horncastle,Alan P., 2015. "A Practitioner's Guide to Stochastic Frontier Analysis Using Stata," Cambridge Books, Cambridge University Press, number 9781107029514, September.
    13. James M. Poterba, 1994. "A Skeptic's View of Global Budget Caps," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 67-73, Summer.
    14. Cheng, Shou-Hsia & Chen, Chi-Chen & Chang, Wei-Ling, 2009. "Hospital response to a global budget program under universal health insurance in Taiwan," Health Policy, Elsevier, vol. 92(2-3), pages 158-164, October.
    15. Miaw-Chwen Lee & Andrew M. Jones, 2004. "How did Dentists Respond to the Introduction of Global Budgets in Taiwan? An Evaluation Using Individual Panel Data," International Journal of Health Economics and Management, Springer, vol. 4(4), pages 307-326, December.
    16. Chia-Hsuan Wu & Ching-Cheng Chang & Po-Chi Chen & Ken-Nan Kuo, 2013. "Efficiency and productivity change in Taiwan’s hospitals: a non-radial quality-adjusted measurement," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 21(2), pages 431-453, March.
    17. Benstetter, Franz & Wambach, Achim, 2006. "The treadmill effect in a fixed budget system," Journal of Health Economics, Elsevier, vol. 25(1), pages 146-169, January.
    18. Roger Feldman & Felix Lobo, 1997. "Global Budgets and Excess Demand for Hospital Care," Health Economics, John Wiley & Sons, Ltd., vol. 6(2), pages 187-196, March.
    19. Mougeot, Michel & Naegelen, Florence, 2005. "Hospital price regulation and expenditure cap policy," Journal of Health Economics, Elsevier, vol. 24(1), pages 55-72, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Meng-Chi Tang & Yi-Nong Wu, 2020. "Medical providers as double agents in a universal health care system: evidence from generic pharmaceutical adoption in Taiwan," Empirical Economics, Springer, vol. 59(1), pages 169-203, July.
    2. Lin, Lee-Kai, 2022. "Effects of a global budget payment scheme on medical specialty workforces," Social Science & Medicine, Elsevier, vol. 309(C).
    3. Li Xiang & Zhengdong Zhong & Junnan Jiang, 2022. "The Response of Different-Levels Public Hospitals to Regional Global Budget with a Floating Payment System: Evidence from China," IJERPH, MDPI, vol. 19(23), pages 1-11, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chang, Shun-Chiao & Lin, Chi-Feng & Yeh, Ta-Chun & Chang, Chun-Wei, 2019. "Determinants of the performance of traditional Chinese medicine clinics in Taiwan," Health Policy, Elsevier, vol. 123(4), pages 379-387.
    2. Lin, Lee-Kai, 2022. "Effects of a global budget payment scheme on medical specialty workforces," Social Science & Medicine, Elsevier, vol. 309(C).
    3. Chang, Ray-E. & Hsieh, Chi-Jeng & Myrtle, Robert C., 2011. "The effect of outpatient dialysis global budget cap on healthcare utilization by end-stage renal disease patients," Social Science & Medicine, Elsevier, vol. 73(1), pages 153-159, July.
    4. Pi-Fem Hsu, 2014. "Does a global budget superimposed on fee-for-service payments mitigate hospitals’ medical claims in Taiwan?," International Journal of Health Economics and Management, Springer, vol. 14(4), pages 369-384, December.
    5. 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.
    6. Bradley Chen & Victoria Y. Fan, 2015. "Strategic Provider Behavior Under Global Budget Payment with Price Adjustment in Taiwan," Health Economics, John Wiley & Sons, Ltd., vol. 24(11), pages 1422-1436, November.
    7. Li Xiang & Zhengdong Zhong & Junnan Jiang, 2022. "The Response of Different-Levels Public Hospitals to Regional Global Budget with a Floating Payment System: Evidence from China," IJERPH, MDPI, vol. 19(23), pages 1-11, November.
    8. Joseph Squillace, 2009. "The Economics of Medicaid Dental Care: How Global Budget Methods Affect Reimbursement," Poverty & Public Policy, John Wiley & Sons, vol. 1(2), pages 1-20, July.
    9. Subal C. Kumbhakar & Christopher F. Parmeter & Valentin Zelenyuk, 2022. "Stochastic Frontier Analysis: Foundations and Advances I," Springer Books, in: Subhash C. Ray & Robert G. Chambers & Subal C. Kumbhakar (ed.), Handbook of Production Economics, chapter 8, pages 331-370, Springer.
    10. Braendle, Thomas & Colombier, Carsten, 2020. "Budgetary targets as cost-containment measure in the Swiss healthcare system? Lessons from abroad," Health Policy, Elsevier, vol. 124(6), pages 605-614.
    11. Ferreira, D.C. & Marques, R.C., 2019. "Do quality and access to hospital services impact on their technical efficiency?," Omega, Elsevier, vol. 86(C), pages 218-236.
    12. Lai, Yi & Fu, Hongqiao & Li, Ling & Yip, Winnie, 2022. "Hospital response to a case-based payment scheme under regional global budget: The case of Guangzhou in China," Social Science & Medicine, Elsevier, vol. 292(C).
    13. Makoto Kakinaka & Ryuta Kato, 2013. "Regulated medical fee schedule of the Japanese health care system," International Journal of Health Economics and Management, Springer, vol. 13(3), pages 301-317, December.
    14. Varabyova, Yauheniya & Schreyögg, Jonas, 2013. "International comparisons of the technical efficiency of the hospital sector: Panel data analysis of OECD countries using parametric and non-parametric approaches," Health Policy, Elsevier, vol. 112(1), pages 70-79.
    15. Shin‐Yi Chou & James A. Dearden & Mary E. Deily & Hsien‐Ming Lien, 2020. "Provider responses to a global budgeting system: The case of drug expenditures in Taiwan hospitals," Health Economics, John Wiley & Sons, Ltd., vol. 29(10), pages 1270-1278, October.
    16. Yauheniya Varabyova & Carl Rudolf Blankart & Jonas Schreyögg, 2017. "Using nonparametric conditional approach to integrate quality into efficiency analysis: empirical evidence from cardiology departments," Health Care Management Science, Springer, vol. 20(4), pages 565-576, December.
    17. Margit Malmmose & Karoline Mortensen & Claus Holm, 2018. "Global budgets in Maryland: early evidence on revenues, expenses, and margins in regulated and unregulated services," International Journal of Health Economics and Management, Springer, vol. 18(4), pages 395-408, December.
    18. Isabelle Hirtzlin, 2006. "The Implementation and Pitfalls of Health Care Spending Targets in France," Working Papers hal-00942759, HAL.
    19. Isabelle Hirtzlin, 2006. "The Implementation and Pitfalls of Health Care Spending Targets in France," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00942759, HAL.
    20. Katalin Gaspar & France Portrait & Eric Hijden & Xander Koolman, 2020. "Global budget versus cost ceiling: a natural experiment in hospital payment reform in the Netherlands," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(1), pages 105-114, February.

    More about this item

    Keywords

    Hospital efficiency; Global budgeting; Stochastic frontier analysis; Universal health care;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:empeco:v:55:y:2018:i:3:d:10.1007_s00181-017-1317-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.