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Provider responses to a global budgeting system: The case of drug expenditures in Taiwan hospitals

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Listed:
  • Shin‐Yi Chou
  • James A. Dearden
  • Mary E. Deily
  • Hsien‐Ming Lien
Abstract
In July 2002, a global budgeting system was imposed on hospitals in Taiwan. This system set a fixed budget for all hospitals within a region but included special provisions that sheltered reimbursements for drug expenditures. We study the size and nature of changes in hospital physicians' use of drugs for outpatient care following this budgetary change and find that drug expenditures for outpatient care increased by 11.7%. Our results suggest that physicians began prescribing more expensive drugs, more drugs, and drugs for longer periods but that these different responses did not all occur at the same time. The overall response was strongest in for‐profit hospitals, but drug‐related decisions changed in all hospital types.

Suggested Citation

  • 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.
    • Handle: RePEc:wly:hlthec:v:29:y:2020:i:10:p:1270-1278
    DOI: 10.1002/hec.4137
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    References listed on IDEAS

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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Chris Sampson’s journal round-up for 12th October 2020
      by Chris Sampson in The Academic Health Economists' Blog on 2020-10-12 11:00:03

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    Cited by:

    1. Meng‐Chi Tang, 2023. "A structural analysis of physician agency and pharmaceutical demand," Health Economics, John Wiley & Sons, Ltd., vol. 32(7), pages 1453-1477, July.

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