QualityBased Payment Taiwans Experience

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Quality-Based Payment- Taiwans Experience

• Hong-Jen Chang, MD, MPH, MS
• CEO and President
• Bureau of National Health Insurance
• Taiwan, June 6, 2004

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Background

• The NHI program since 1995 has successfully
  improved Taiwaneses access to care and provided
  them a greater financial risk protection (Lu and
  Hsiao, 2003 Cheng, 2003).
• Serious concern over provider withholding care
  due to recent rigorous cost containment
  strategies has placed quality assurance on top of
  the government agenda.
• Among a number of methods, quality-based payment
  seems to be one most appealing policy tool to
  change provider behaviors in improving quality.

Cheng, T.M. Taiwans new National Health
Insurance program genesis and experience so
far, Health Affairs 22, no. 3 (2003) 61-76. Lu,
J.R. and Hsiao, W.C., Does universal health
insurance make health care unaffordable? Lessons
from Taiwan, Health Affairs 22, no. 3 (2003)
77-88.
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Motivation

• The existing literature indicates that financial
  incentives have significant influences on
  provider behaviors.
• Ideally, linking provider reimbursement directly
  to quality can serve as a powerful policy tool to
  improve quality of care.
• Selection of diseases, quality measures, data
  availability, risk adjustment make quality-based
  payment difficult to implement.
• Very few quality-based payment programs and
  systematic evaluations are available worldwide.

Hanchak, N.A., Schlackman N., and Harmon-Weiss
S., U.S. Healthcares quality-based compensation
model, Health Care Financing Review 17, no.3
(1996) 143-159. Dudley, R.A., Miller, R.H.,
Korenbrot, T.Y., Luft, H.S., The impact of
financial incentives on quality of health care,
The Milbank Quarterly 76, no.4 (1998) 649-686.
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NHI in Taiwan(1)

• Mandatory enrollment
• Single-payer system
• Public Administration
• Payroll-related premium rate
• Contribution shared by the employer, the employee
  and the government

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NHI in Taiwan(2)

• Universal coverage
• Benefits ambulatory and inpatient care,
  prescription drug, preventive services, lab
  tests, diagnostic imaging, Chinese medicine, and
  dental care.
• Complete freedom of choice among provider and
  therapies.
• A mix of public and private providers. Private
  practicing doctors do not have hospital admitting
  privileges.
• FFS under global budgets.

Cheng, T.M. Taiwans new National Health
Insurance program genesis and experience so
far, Health Affairs 22, no. 3 (2003) 61-76. Lu,
J.R. and Hsiao, W.C., Does universal health
insurance make health care unaffordable? Lessons
from Taiwan, Health Affairs 22, no. 3 (2003)
77-88.
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Overview of Taiwan NHI Payment System

• Fee for Servicesmajor unit of payment
• Costs claimed based on NHI Fee Schedules and Drug
  Price List
• Case Payment 50 disease categories
• Capitationventilator-dependent patients
• Quality-based Payment SystemDM, Asthma,TB..etc
• Global budgetsdental care, traditional Chinese
  medicine, primary care , hospital care

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NHI Payment Reform

• Macro management
• Global budget
• Micro management
• Case payment based on DRGs/APGs
• FFS (price)
• Relative Value Fee Schedule (RBRVS)
• Pharmaceutical Price List
• Performance/Quality-based payment system
• Disease/outcome Management
• Family physician
• Center of Excellence project for hospitals

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Quality-Based Payment in Taiwan

• 5 major diseases- cervical cancer, breast cancer,
  diabetes, tuberculosis, and asthma.
• Started on October 01, 2001
• Provides extra financial rewards to providers in
  addition to the NHI fee schedule.
• Finance of these extra rewards is not from global
  budgets.
• Future to include more outcomes measures, and
  expand to more diseases.

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Quality Key Features

• Structure Hospital and physician qualification
  requirement
• Process
• Cervical cancer rewards based on monthly volume
  growth rate of pap smear screening provided.
• 4 other diseases rewards based on compliance
  with the NHI guidelines.
• Outcome
• TB breast cancer rewards based on full
  recovery and survival rates

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Incentives Key Features

• FFS Extra Bonus
• Incentive schemes
• FFS Cervical cancer
• Capitation by patient Breast cancer, TB, asthma
  and diabetes
• Incentives for Whom
• Hospital/clinic only Cervical cancer, breast
  cancer, diabetes
• Physician only Asthma
• Hospital/clinic physician TB

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Preliminary Results Asthma
Before from April 01, 2001 to June 30,
2001. After from April 01, 2002 to June 30, 2002.
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Preliminary Results TB

• 9 month cure rate for TB participants 40.69
• 9 month cure rate for all TB cases in Taiwan
  30.1 (From the Center of Disease Control in
  Taiwan).

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Summary

• Single payer system, limited authority of
  selective contracting, and controversies over
  public reporting of provider performance ? Pay
  for Quality.
• Theoretical dilemmas in program development
• Disease treatment uncertainties make linking
  payments to outcome less justifiable and
  favorable (e.g. Asthma).
• Difficulty of measuring and risk adjusting
  clinically significant outcomes leads to the
  program to rely on surrogate process indicators
  (e.g. Diabetes).
• Complete freedom of provider choice and lack of
  family doctor system do not allow provider to
  have a fixed patient population, so for
  preventive services such as cervical cancer
  screening, the program compromises to use
  volume/growth rate.

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Summary

• Practical challenges
• Typical problem of interest group politics. In
  order to resolve opposition to this program and
  encourage participation from providers, the
  original experiment design was compromised (phase
  in and controlled experimental design was not
  allowed).
• Inadequate financial resources to provide strong
  incentives to encourage provider participation
  and induce behavioral changes.
• Detailed planning and scientific design are
  extremely important for successful development of
  payment reform and evaluation.

McNamara P. Quality-based purchasing What do we
know about impact in developing countries, what
do we need to know? Manuscript. Waters H.,
Morlock LL., Hatt L. How healthcare purchasers
can influence quality- A conceptual framework and
comparative analysis of contextual factors.
Manuscript.
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Future Policy Direction

• Expand program scope to more diseases
• (Hypertension, hepatitis BC, and schizophrenia)
• Include more outcome measures.
• Increase financial incentives
• Simplify administrative process
• Encourage provider participation
• Integrate with 2nd generation of health care
  reform project

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Future Research Direction

• Take study design and validity issues of program
  evaluation into consideration when designing the
  forthcoming program expansion
• Collect baseline information
• Select appropriate control groups (different
  phase-in periods for different geographic areas).
• Select meaningful outcome measures
• Collaborate with both domestic and international
  experts in program planning and evaluation.

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• Thank you!