Changes in the prescription pattern of antipsychotics for schizophrenic outpatients after the implementation of a global budgeting program.

BACKGROUND: A hospital-based global budget (GB) program was implemented by the Taiwan Bureau of National Health Insurance (TBNHI) to control the rising costs of medical care. We investigated whether the introduction of the GB program affected prescriptions for second-generation antipsychotics (SGAs) for schizophrenic outpatients in public and private medical and psychiatric centers. METHODS: The prescription data of schizophrenic outpatients treated between 2001 and 2004 were retrieved from the TBNHI database, which included outpatients who were diagnosed as having schizophrenia during the period from 1996 to 2001. Because the new health insurance policy may have had a lag effect on physicians' decision regarding SGA prescription, we used January 2004 as the timepoint to divide the data, which was 6 months after GB implementation. Thus, data from the 6-month period immediately after the GB implementation were included in the pre-GB period. Second-generation antipsychotics included in the study were clozapine, risperidone, olanzapine, quetiapine, ziprasidone, zotepin, and amisulpride. RESULTS: After January 2004, the proportion of SGA use in outpatient departments did not show an upward trend, as had been observed in the pre-GB period, which appeared at a staggering pace lasting for 12 months (p = 0.0004). Compared with medical centers, SGA expenditures in the psychiatric centers were less affected in the GB period (p < 0.0001). Compared to the private sector, the SGA expenditures in the public sector were less affected in the GB period (p < 0.019). CONCLUSION: We concluded that the GB implementation reduced SGA expenditures significantly. The extent of influence varied among hospitals (i.e., public versus private, medical versus psychiatric centers), which was most likely caused by financial factors.

Assessing the effects of drug price reduction policies on older people in Taiwan.

This study investigates the initial effects of the government's prescription drug price reduction policies on outpatient hypertension treatment for the elderly in Taiwan. The National Health Insurance scheme has taken a number of steps in recent years to reduce drug prices. The data used in the study comprises the medical records of approximately 137,000 hypertension patients aged 65 and above. Regression analysis is used to determine whether the average cost of prescription drugs has declined as a result of the policy. In addition, the probit model is used to examine changes in physicians' prescribing behaviour for reduced-price and full-price drugs and the effect of drug substitution on health outcomes. We find that the average cost per prescription increased slightly despite the implementation of the price reduction policies. In addition, we found that physicians do substitute full-price drugs for reduced-price drugs. However, they appear to be reluctant to reduce the use of essential drugs, even when facing rate reductions. The evidence suggests that physicians consider the profit they can derive by prescribing certain drugs; hence, health policy officials should monitor the effects of possible drug substitutions when they design policies for their own countries.

Changes in prescribing behaviors after implementing drug reimbursement rate reduction policy in Taiwan: implications for the medicare system.

Prescription drug costs are the fastest rising component of health care spending worldwide. To control drug costs, the Bureau of the National Health Insurance in Taiwan has taken a series of actions over the years to reduce drug reimbursement rates. The purpose of this study is to investigate changes in physicians' prescribing behaviors after initial implementation of drug reimbursement rate reduction policy in Taiwan. For the study, variance cost analysis was used to investigate how physicians reacted after implementation of a policy that reduced selected drug reimbursement rates. The results indicate that the existence of financial benefits from prescribing drugs seems to create an incentive for physicians to increase prescription duration and drug items per prescription. In addition, differences in drug reimbursement rates may create incentives to prescribe drugs with higher revenue instead of lower revenue. From Taiwan's experience, we know that price is merely one of the many factors that influences drug expenditures. Taiwan's experience may offer lessons for the future of the Medicare system, as well as for non-US health policy officials when they design similar policies for their own countries.

Does capitated contracting improve efficiency? Evidence from California hospitals.

This study examines the effect of capitated contracting on hospital efficiency to better understand strategies related to the recent financial crisis in the California health care market. Our findings indicate that less efficient hospitals are more likely to participate in capitated contracting. As a result, hospitals with capitated contracts are, on average, less efficient than hospitals without capitated contracts. Hospital efficiency generally increases with respect to the degree of capitation involvement. The efficiency improvement, however, becomes insignificant when capitation exposures are already high. Thus, hospital executives should not be overly optimistic about efficiency gains obtained in capitated contracting and should control the degree of capitation involvement.

Changes in drug utilization following the outpatient prescription drug cost-sharing program--evidence from Taiwan's elderly.

This paper examines changes in drug utilization following Taiwan's newly implemented National Health Insurance (NHI) outpatient prescription drug cost-sharing program for persons over 65 years old. The study is a hospital outpatient prescription level analysis that adopts a pretest-posttest control group experiment design. Selected measures of outpatient prescription drug utilization are examined for cost-sharing and non cost-sharing groups in cost-sharing periods and pre cost-sharing periods. Additional analyses were conducted comparing older patients with and without chronic diseases and differences for essential and non-essential drugs. Patients over age 65 were drawn from 21 hospitals in the Taipei area using a stratified random sampling method. This paper yields several interesting findings. First, average prescription cost and prescription period increased for both the cost-sharing and non cost-sharing groups. However, the rate of increase was significantly less in the cost-sharing group when compared with the non cost-sharing group. Second, the elderly with non-chronic diseases were more sensitive (i.e., reducing drug utilization) to the drug cost-sharing program when compared with those with chronic diseases. Third, for the elderly with non-chronic diseases average drug cost per prescription experienced a smaller decrease in essential drugs but a moderate increase in non-essential drugs for the cost-sharing group. By contrast, for the non cost-sharing group, average drug cost per prescription increased sharply in non-essential drugs as well as essential drugs. Finally, there was a significant increase in the number of prescriptions as well as drug costs above the upper bound of the cost-sharing schedule. The outpatient drug cost-sharing program implemented by the NHI in Taiwan did not reverse the trend of prescription drug cost increases in hospitals. The significant increase in the number of prescriptions above the upper bound of the cost-sharing schedule implies that the NHI should increase the upper bound. Further analysis needs to evaluate any adverse clinical impact for older patients resulting from policy changes.

Assessing the effect of Taiwan's outpatient prescription drug copayment policy in the elderly.

OBJECTIVES: This study uses variance cost analysis and regression analysis as tools for investigating the initial effects of Taiwan's outpatient prescription drug copayment program in the elderly. Under its new National Health Insurance program, Taiwan implemented a prescription drug cost-sharing program August 1, 1999. We compare an elderly population's prescription drug use after the policy was implemented with an elderly population's prescription drug use before the policy change to describe initial and general consequences of the drug cost-sharing program. METHODS: Approximately 240,000 patients aged 65 and over representing 1,600,000 outpatient prescriptions were drawn from 21 hospitals in the Taipei area for the study using a stratified random sampling method. Variance analysis, as used primarily in accounting, was applied to decompose overall cost variance of the policy into the sum of variances of several specific factors that are important to policymakers. The cost variances of each specific factor can be further decomposed into sublevels of analyses. Regression analysis is then applied to better understand covariates that might influence drug cost variances of significant magnitude. RESULTS: The initial effects of the policy change did not reverse the trend of drug cost increases. Instead, there was a significant increase in total prescription drug costs in the cost-sharing group (approximately 12.86%) and an even higher increase rate in the non-cost-sharing group (approximately 51.42%). The main reason for the drug cost increase for the cost-sharing group was attributed to an increase in average drug costs per prescription (explaining 69.20% of the variance). We found physicians seemed to prescribe more expensive drugs and extend prescription duration, especially when drug costs exceed the upper bound of the cost-sharing schedule. By contrast, the main factor contributing to the increase in drug costs for the non-cost-sharing group was an increase in average prescription duration (explaining 64.98% of the variance). The increase mainly results from the effect of extended prescriptions for chronic diseases that were designed to reduce unnecessary visits for refills. DISCUSSION: The significant increase in average drug price per prescription indicates that many prescriptions could move above the upper bound of the cost-sharing schedule. The results suggest that the Bureau of National Health Insurance should increase the upper bound. We do not think these effects are unique to Taiwan. Rather, these effects should be considered as countries change their outpatient drug benefit programs. We also found a decrease in utilization of essential drugs with an increase in utilization of nonessential drugs for patients subject to copayments. The results suggest potential adverse effects on patients' health outcome.

The initial effects of Physician Compensation Programs in Taiwan hospitals: implications for staff model HMOs.

This paper examines whether a Physician Compensation Program (PCP), which was based on the responsibility centers system, improved departmental efficiency in a large Taiwan teaching hospital. PCPs in Taiwan may have implications for staff-model HMOs. Monthly financial data and related information for 58 departments in the 5 months following the introduction of the program (the PCP period) and the corresponding 5 months before the introduction of the program (the pre-PCP period) were provided by the case hospital. The Data Envelopment Analysis (DEA) model is used to measure the operational efficiency of each department in the case hospital over the two periods. We first use asymptotic DEA-based tests to examine whether differences in efficiency scores between the two periods are significant. Then, a multi-factor tobit model is used to examine factors that might explain the observed differences in efficiency. The data of each month in the PCP period (November 1996-March 1997) and the pre-PCP period (November 1995-March 1996) are used to calculate efficiency scores and control for monthly effects. We find that average efficiency improves after the implementation of the PCP, with or without controlling for other related factors. Physicians' seniority and percentage of physicians' service time in the department are associated with improved efficiency. Finally, departments with higher profits and fewer numbers of employees are associated with higher efficiency. The findings suggest that to achieve an increase in hospital efficiency in Taiwan, responsibility centers should be integrated with formal physician compensation programs. Such results have implications for staff model HMOs in the US and their variants in countries with national health insurance.

Does the implementation of responsibility centers, total quality management, and physician fee programs improve hospital efficiency? Evidence from Taiwan hospitals.

OBJECTIVES: This study evaluates whether the implementation of various types of hospital-physician integration strategies, such as the responsibility centers system, total quality management, and physician fee programs, enhance efficiency for Taiwan hospitals. Because hospitals in Taiwan are structurally similar to staff-model HMOs, the study has implications beyond Taiwan. RESEARCH DESIGN: The Data Envelopment Analysis model is applied to measure hospital efficiency. Hospital efficiency refers to the ability to produce more outputs (eg, ambulatory and emergency visits, inpatient days, and inpatient visits) with the same inputs (eg, physicians, nurses, ancillary labor, and hospital beds). The sample consists of 90 general hospitals in Taiwan from 1994 to 1996. In addition, multitobit regression analysis is used to simultaneously estimate the effects of the hospital-physician integration strategies and provide better control for the effect of other factors (eg, size, degree of competition, ownership structure, teaching status, and the change in regulatory regime) that may also affect hospital efficiency. RESULTS: When evaluating the hospital-physician integration strategies individually, hospitals that implemented the responsibility centers system, total quality management, and physician fee programs were more efficient than hospitals that did not. Controlling for other factors using the multitobit model, hospitals that implemented physician fee programs remained significantly more efficient than others. In addition, hospitals that implemented total quality management were more efficient when they had implemented the strategy for at least 2 years. Hospitals that implemented the responsibility centers system were more efficient but only when integrating the system with formal incentive schemes. CONCLUSIONS: Physician fee programs seem to provide the most direct and robust incentives to enhance hospital efficiency under a fee-for-service regime like that in Taiwan. Because of time-lagged effects, hospitals that implemented the total quality management programs were more efficient but only when the programs had been implemented for at least 2 years. The responsibility centers system can also be effective when the system was associated with formal incentive schemes. The results indicate the importance of having both the individual-based and team-based incentives in place. Finally, the hospital-physician integration strategies appear to be effective individually, but the results change significantly when they are evaluated simultaneously, together with other control variables, in the tobit model. This indicates the importance of investigating hospital-physician integration strategies as a portfolio instead of a single tool.