Reported by Liu Chia-Yun from Taipei

The number of district hospitals has decreased by 36% since the NHI started 20 years ago.  Prof. Liu Ya-Min of the Department of Economic Studies of the National Cheng-Kung University analysed the NHI big data and found that the NHI Global Budget system has an effect on the polarization of hospitals.  District hospitals are losing out in the competition, especially in southern Taiwan.  The Taiwan Healthcare Reform Foundation (THRF) urges the authority to expedite the reform of the NHI payment standards and to improve the referral system.

According to Prof. Liu, before the implementation of the NHI Global Budget system in 2002, hospital closure rate was higher in remote area.  However, after 2002, hospital closure in urban areas became more common.  This change shows that there is a severe competition among hospitals in urban areas; and the implementation of the Global Budget system has incited the competition.  Under the Global Budget system, the increase in hospitals and service volume will lead to a decrease in the money received by hospitals.  As hospitals are struggling to cover their cost, closure becomes very likely. 

The difference in the NHI payment standards also contributes to the polarization of the hospital system.  Prof. Liu pointed out that big hospitals receive more payments than small hospitals for the same treatment.  For example, district hospitals receive NT$2,000 less than medical centers for appendicitis surgery, and NT$1,700 less for Caesarean section.

The NHIA introduced a differential co-payment system this year as a measure to encourage patients to seek treatments for ailments in small hospitals.  Before the introduction of the system, patients would choose big hospitals over small hospitals because there was no price difference.  As a result, big hospitals were thriving, while small hospitals were struggling. 

Gu Chi-Feng, a researcher of the THRF, expressed that the current NHI payment system has two major issues: “different payments for the same treatment” and “same payment for different treatments”.  For example, the payment for the same condition is different between medical centers and district hospitals; and diagnosis fees are the same for diagnosing cold and complicated heart problems.  A sound referral system should be able to adequately direct some patients to district hospitals and health clinics and save the primary care services.

【2017-08-08/ United Daily】