National health insurance in Taiwan : welfare analysis and hospital competition Public Deposited

http://ir.library.oregonstate.edu/concern/graduate_thesis_or_dissertations/05741v726

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  • This dissertation consists of three essays that evaluate various types of health care policies from the social welfare perspective. Chapter 1 introduces the main ideas and framework of this dissertation. Chapter 2 evaluates the new co-payment policy, enacted on July 15, 2005 under Taiwan’s National Health Insurance (NHI). We show that this new policy is unlikely to change consumers’ health care seeking behavior. The co-payment policy can reduce the financial burden of the NHI, but it may have a potentially harmful effect from the social welfare perspective. Chapter 3 simulates the impact of user-fee policies on the choice of health care under Taiwan’s NHI. The pricing-out effect and welfare effect are estimated using a willingness to pay approach. Our empirical results suggest that the Taiwan government still has room to increase the NHI’s premium since the willingness-to-pay rate (measured as percentage of household income) is much higher than the new premium proposed by the Taiwan government. Chapter 4 is a theoretical treatment of hospital competition under the Global Budget Payment System (GBPS) that explicitly responds to two recent criticisms of the GBPS in the literature. These criticisms are the following: (1) the GBPS is inferior to the Prospective Payment System (PPS) because the GBPS fails to achieve the first best allocation that can be achieved by the PPS; (2) under the GBPS, hospitals will provide more health care services in accordance with a lower reimbursement payment due to a fixed budget, referred to as the treadmill effect. Prior research suggests that the treadmill effect often causes a lower quality of care. We show that the GBPS can approach the optimal levels of quality and slack generated by the PPS, and that the treadmill effect is a social welfare improvement outcome. Based on our theoretical analyses, we suggest that these two criticisms are highly suspect, and that further empirical studies are necessary to identify whether the GBPS is necessarily related to low quality of care. Chapter 5 presents the major contributions of this dissertation.
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