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Assessing Taiwan’s pay-for-performance program for diabetes care: a cost–benefit net value approach

Author

Listed:
  • Jui-fen Rachel Lu

    (Chang Gung University
    Chang Gung Memorial Hospital in Linkou)

  • Ying Isabel Chen

    (National Taiwan University)

  • Karen Eggleston

    (Shorenstein Asia-Pacific Research Center, Freeman Spogli Institute for International Studies, Stanford University, and NBER)

  • Chih-Hung Chen

    (Chang Gung Memorial Hospital)

  • Brian Chen

    (University of South Carolina)

Abstract

Pay-for-Performance (P4P) to better manage chronic conditions has yielded mixed results. A better understanding of the cost and benefit of P4P is needed to improve program assessment. To this end, we assessed the effect of a P4P program using a quasi-experimental intervention and control design. Two different intervention groups were used, one consisting of newly enrolled P4P patients, and another using P4P patients who have been enrolled since the beginning of the study. Patient-level data on clinical indicators, utilization and expenditures, linked with national death registry, were collected for diabetic patients at a large regional hospital in Taiwan between 2007 and 2013. Net value, defined as the value of life years gained minus the cost of care, is calculated and compared for the intervention group of P4P patients with propensity score-matched non-P4P samples. We found that Taiwan’s implementation of the P4P program for diabetic care yielded positive net values, ranging from $40,084 USD to $348,717 USD, with higher net values in the continuous enrollment model. Our results suggest that the health benefits from P4P enrollment may require a sufficient time frame to manifest, so a net value approach incorporating future predicted mortality risks may be especially important for studying chronic disease management. Future research on the mechanisms by which the Taiwan P4P program helped improve outcomes could help translate our findings to other clinical contexts.

Suggested Citation

  • Jui-fen Rachel Lu & Ying Isabel Chen & Karen Eggleston & Chih-Hung Chen & Brian Chen, 2023. "Assessing Taiwan’s pay-for-performance program for diabetes care: a cost–benefit net value approach," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 24(5), pages 717-733, July.
  • Handle: RePEc:spr:eujhec:v:24:y:2023:i:5:d:10.1007_s10198-022-01504-3
    DOI: 10.1007/s10198-022-01504-3
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    References listed on IDEAS

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    1. Alina Peluso & Paolo Berta & Veronica Vinciotti, 2019. "Do pay-for-performance incentives lead to a better health outcome?," Empirical Economics, Springer, vol. 56(6), pages 2167-2184, June.
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    1. R. V. Naveenan & Chee Yoong Liew & Ploypailin Kijkasiwat, 2024. "Nexus Between Financial Inclusion, Digital Inclusion and Health Outcomes: Evidence from Developing Economies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 174(1), pages 367-408, August.

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    More about this item

    Keywords

    Pay-for-performance; National Health Insurance; Diabetes; Net value; Taiwan;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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