Keywords

Introduction

After medical institutions provide medical services to patients, the insurer—the National Health Insurance Administration (NHIA)—pays them through various measures constituting a “payment system.” The various payment methods include fee-for-service, case payment, per diem payment, pay-for-performance, Taiwan diagnosis-related groups (Tw-DRGs), capitation payment (in the pilot program), and global budget payment (Fig. 3.1). Different payment systems influence how medical providers deliver medical services, which subsequently affects patient treatment and care. At the same time, they have a tremendous impact on the overall growth in medical expenses, the allocation of medical resources, and medical efficiency and quality. Therefore, how to choose a more appropriate payment system requires further discussion.

Fig. 3.1
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Evolution of the National Health Insurance payment system

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The payment system of health insurance in most countries is “fee-for-service,” that is, the more you do to patients, the more money you make. The advantage is that the doctors can decide the treatment according to the disease severity, patient’s need, and the volume of medical services provided is related to remuneration. The disadvantage is that the insurer pays strictly for the medical services the doctor provides with no consideration of treatment quality or efficacy, thus creating no incentives for medical providers to reduce the number of unnecessary medical services they provide.

Although the diversified payment methods have been implemented successfully, the “fee-for-service” is still the main payment method, which results in fast-growing medical expenses. In addition, the medical resources are limited, so the global budget payment system was implemented in 2002 to promote reasonable use of medical resources and strike a balance of conflicting interests between payers and medical service providers under the negotiation mechanisms.

The National Health Insurance (NHI) Fee Schedule is adjusted from the macro and objective perspective to promote appropriate and high-quality medical behaviors. The NHIA constantly revises the fee schedule to encourage medical providers with reasonable medical payments and improve the current medical environment.

Different Payment Methods in the National Health Insurance System

A Simple Explanation of the Global Budget Payment System

In the global budget payment system, the payers and the medical service providers negotiate the total medical expenditure (global budget) in advance for certain medical services, including dental outpatient, Chinese medicine outpatient, Western medicine outpatient, and inpatient services for the future period (usually 1 year ahead) and reimburse the medical services provided by each medical department during the period. A payment system such as this is aimed at ensuring the financial balance of health insurance.

Taiwan’s NHI global budget has “upper limit expenditure.” The annual global budget for health insurance expenditures is allocated in advance based on the growth of the cost and the volume of medical services. The relative value units (RVUs) of medical services reflect the costs of those services, and the amount paid per RVU is retrospectively priced by dividing the actual total medical service volume (RVUs) into the global budget cap. When the actual total medical service volume is greater than the originally agreed-upon total medical service volume, the payment amount per RVU decreases, and conversely, if the total volume is less than the originally agreed-upon total, the payment amount per RVU increases. Because this payment system has a fixed annual global budget, the medical expenditures can be controlled precisely. Medical providers will be aware of the annual global budget in advance, so incentives to obtain excessive remuneration by providing excessive medical services can be reduced through peer constraints. Therefore, overall medical behaviors should be inclined toward a reasonable direction.

Introduction to Each Payment Method

  1. 1.

    Fee-for-service: the predominant payment method of the NHI. The RVUs of each medical service, drug, and medical device are set, and the medical providers submit the claim for medical expenses to the insurer based on the medical services they provide every month.

  2. 2.

    Pay-for-performance: quality-oriented payment systems are promoted for diseases with large cost impacts, many patients, and care models that need to be improved to encourage hospitals to establish a patient-centered integrated care model. This payment method provides additional incentives such as managed care fees and quality bonuses to encourage medical institutions to improve the quality of care. At present, the pay-for-performance plans for diabetes, asthma, breast cancer, schizophrenia, early-stage chronic kidney diseases and pre-end-stage renal disease, hepatitis B and C tracking, full-course maternity care, early intervention for developmental retardation, chronic obstructive pulmonary disease, and hospital medication safety improvement have been implemented.

  3. 3.

    Case payment: for relatively simple medical services with less variation in consumption, a fixed package payment is set for the medical visit—for example, delivery, cataract surgery, extracorporeal shock wave lithotripsy for urinary tract stones.

  4. 4.

    Tw-DRGs: diagnosis-related groups (DRGs) is an inpatient payment method that groups diseases with similar diagnostic categories or similar treatments and then subdivides them into different DRGs according to patient age, gender, comorbidities, complications, and discharge status. The RVUs of inpatient payment of each DRG service were calculated based on claims from previous years.

  5. 5.

    Per diem payment: for inpatient cases with specific diseases or specific treatments, the per diem payment is set according to the type of disease. Regardless of the number of medical services provided, the medical expenses are calculated based on the length of stay at the hospital and the per diem payment, for example, chronic psychiatric inpatient, inpatient hospice.

  6. 6.

    Capitation payment: capitation is a prospective payment method that providers are paid in a fixed amount per patient, and the medical expenses are prearranged between the insurer and the medical providers based on the different health types of patients, for example, age, gender, medical cost. By building an integrated medical care system and emphasizing the concept of patient-centered care, preventive health care, acute and chronic disease care, and other health care are provided by specific medical providers for the comprehensive care.

The advantages and disadvantages of each payment system are described in Table 3.1.

Table 3.1 Comparison of the advantages and disadvantages of various payment methods
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Implementation of Pay-for-Performance and Bundled Payment in Recent Years

The promotion for the pay-for-performance payment method is carried out by several projects. The process indicators and the performance indicators are set in each project, and medical institutions receive additional rewards according to their implementation conditions. In 2019, the total RVUs of the implementation of pay-for-performance projects were 1.42 billion, and the implementation status is shown in Table 3.2.

Table 3.2 The implementation of various pay-for-performance projects in 2019
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In 2019, the number of case payment cases totaled 406,000, medical expenses totaled 9.84 billion RVUs, and the number of medical visits amounted to approximately 315,000, all showing an increasing trend year by year. In addition, the Tw-DRGs have been implemented under the NHI since 2010. A total of 401 DRGs were implemented in the first and second phases in January 2010 and July 2014 respectively. After the DRG reclassification in 2020, a total of 407 DRGs have been implemented. In 2019, the medical expenses of DRGs accounted for 18% of the overall inpatient medical expenses.

Global Budget Payment System

Because the global budget is negotiated by payers and medical providers through the platform of the National Health Insurance Committee (NHIC), in theory, various cost factors have been fully considered. As a consensus on the budget has been reached (or directly approved by the health authority without a consensus), providers have to reach professional consensus among their peers by exercising strategies such as file or data analysis, resource sharing to reduce medical service volume and increase the RVU value and eventually avoid falling into a vicious circle of doing more and receiving less.

Planning the Annual Global Budget

As the global budget is determined in advance, the negotiating procedure for the annual global budget occurs before the beginning of the year. The health authority—the Ministry of Health and Welfare (MOHW), taking into account the country’s overall economic development and the medical needs of the people, drafts the global budget range for the next year. After consulting the NHIC, the drafted global budget will be submitted to the Executive Yuan for approval 6 months before the start of the year. Then the NHIC, which is composed of representatives of the insured, employers, medical institutions, experts, and scholars, is responsible for the negotiation (Fig. 3.2).

Fig. 3.2
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Procedure for negotiating the annual global budget

Note: According to Article 60 of the National Health Insurance Act, the annual global budget of medical expenses shall be drafted by the health authority and submitted to the Executive Yuan for approval after consulting the NHIC

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Taking the global budget in 2021, for instance, the MOHW suggested that the range of global budget growth rate in 2021 should be 2.907–5.0% after comprehensively considering factors such as overall population growth, aging, medical service costs, new drugs, and special medical devices, allocation of medical resources, and healthcare quality. After being submitted to the Executive Yuan for reconsideration, the range was approved to be 2.907–4.5% and transferred to the NHIC for negotiation. Eventually, the global budget growth rate for 2021 announced was 4.107%, and the global budget was New Taiwan dollars (NTD) 783.6 billion.

The global budget is allocated quarterly, which means the payment amount per RVU is retrospectively settled after the end of the quarter, so the situation that the budget is used up before the end of the year will not happen.

Global Budget Distribution and Management

Taiwan’s National Health Insurance Act (hereinafter referred to as the NHI Act), which stipulates the implementation of the global budget payment system, the global budget of dental outpatients, Chinese medicine outpatients, Western primary-level clinics, hospitals, and other budgets (not covered by the global budget of the four departments mentioned above and the cross-departmental budget), was implemented since July 1998, July 2000, July 2001, and July 2002 respectively. Therefore, it can be said that Taiwan has fully implemented the global budget payment system since July 2002.

Moreover, to promote the balanced medical resource allocations, the principle of “the budget follows the people” is used when distributing the budget to the six districts to strengthen the financial and healthcare responsibilities of each district. For example, in the first year when the global budget of dental outpatients was implemented, 10% of the global budget was distributed according to the adjusted “population risk” of each district and 90% was distributed according to the actual proportion of medical expenses for beneficiaries in each district in the year before the global budget of dental outpatients was implemented. In 2007, the budget distribution was 100% based on the number of those insured and adjusted according to the “population risk” of each district.

The distribution of the global budget of each department and the regional budgets are macrolevel strategies, and microlevel supporting measures are still necessary to improve the efficiency of medical services and reduce medical waste, for example, active investigation and punishment with violations, payment system reforms, fee schedule adjustment, motivation for effective medical services, review system improvement, information system upgrade, enhanced peer management among the medical profession, promotion of My Health Bank system.

The annual global budget is the result of the negotiation and mutual understanding between the payers and the medical providers. Every dollar of the global budget also comes from the premiums paid by those insured, so it must be spent in a worthy way to buy necessary medical care. Medical waste is the last thing we want to see. Therefore, purchasing medical care of higher efficiency and better quality through the improvement of the payment system is the overall goal of the insurer.

Reducing the Provision of Unnecessary and Excessive Medical Services to Increase the Value of the Relative Value Unit

The COVID-19 pandemic has caused a significant decrease in the number of medical visits in 2020. The number of outpatient visits was 360 million in 2018 and increased to 368 million in 2019. Instead of increasing continuously, the number of outpatient visits decreased to 340 million in 2020, which was 28 million less than the number in 2019 and 20 million less than the number in 2018 (Fig. 3.3). During this period, there were no major changes in people’s health.

Fig. 3.3
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Weekly moving average of outpatient visits (full calendar year 2018 vs. 2019 vs. 2020)

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Because the global budget has been fixed, the reduction in the number of medical visits does not reduce the income of the medical institutions from the NHI global budget. On the contrary, owing to the increase in the RVU value, doctors can get the same amount of income as before, without seeing as many patients and this is the path that we have been following. Doctors can concentrate on treating patients properly instead of making reparative appointments and providing more and more medical services to create potential RVUs. This concept was verified during the pandemic. According to the preliminary settlement results of the global budget, the RVU value of the primary-level Western clinics in 2020 is expected to reach more than NTD 1 per RVU.

Relative Value Units and Relative Value Unit Values are the Overall Causes and Outcomes of Each Other

Generally speaking, there is a 7–9% gap between the claimed RVUs and the global budget (Fig. 3.4). Even when only taking the approved RVUs into consideration, there is still a gap of 2–4% from the global budget. According to the RVU growth trend of outpatients and inpatients (Fig. 3.5), the growth rate of outpatient RVUs is higher than that of inpatients, and the percentage of outpatient RVUs reached almost 70% in 2019. With further analysis of outpatient RVUs, the growth rate of medication costs and diagnostic and treatment costs (including examination and test costs) is higher.

Fig. 3.4
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The difference between the global budget and the claimed and approved relevant value units (RVUs) from 2009 to 2019

Note:

1. Global budget (blue), approved RVUs (green), and claimed RVUs (red), excluding other departments

2. Approved RVU value: global budget/approved RVUs (green)

3. Claimed RVU value: global budget/claimed RVUs (red)

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Fig. 3.5
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Trends in the number of outpatient and inpatient claimed relevant value units (excluding other departments) and the number of the patient population from 2009 to 2019

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Some doctors complain that the RVUs for certain items are too low, but the RVU values often drop after the RVUs increase. Some doctors are not satisfied with the low RVU value, hoping to fix the RVU value of certain medical specialties, diseases, or treatments within a certain range. However, with a limited global budget, when the RVU values of these items are guaranteed, the RVU values of other items inevitably drop. The dilemma of whether to raise the payment of certain items or to guarantee their RVU value and fairly satisfy providers’ requests is indeed a difficult problem to address.

To promote the tiered medical care and encourage large hospitals to transfer stable chronic outpatients to primary medical institutions, it is necessary to relatively increase the payment of emergency and critical care to large hospitals. After patients are transferred to the primary medical institutions, it is also crucial to enhance the capability of primary care providers with appropriate payment to maintain the patient’s confidence in seeking medical care from them continuously. Both of these goals could be effectively attained by increasing the RVU and guaranteeing the RVU value.

Adjusting Relative Value Units to Promote Balanced Development of Medical Specialties

After the implementation of a global budget payment system, each medical treatment was related to a corresponding payment of RVUs. However, the medical environment has changed since the NHI system was launched 27 years ago. The cost of treatments related to emergency and critical care has risen rapidly, so the relevant payment also needs to be modified accordingly. To avoid uneven development among the medical specialties, the NHIA has actively striven for budgets to universally increase the payment for main departments such as internal medicine, surgery, obstetrics and gynecology, and pediatrics in recent years.

Over the past 3 years, a budget of NTD 19.5 billion was allocated to adjust the payment for Western medicine, including:

  1. 1.

    In 2017, NTD 11 billion was invested to increase the RVUs of emergency and critical care, including the markup rate of ward fees of district hospitals, inpatient nursing fees, and outpatient diagnostic fees; the first-stage outpatient diagnostic fees in primary medical institutions were increased by 20 RVUs.

  2. 2.

    In 2018, NTD 3.1 billion was invested to increase 5% of the inpatient nursing fees for the intensive care unit (ICU), 31% of the CPR payment, and 20% of the payment in 10 items, including simple sutures/dressing changes, and to encourage district hospitals to provide medical services on holidays.

  3. 3.

    In 2019, NTD 5.4 billion was allocated to increase payment for 116 items of emergency and critical care (with a 4–80% adjustment), and 278 items of operations or treatments that had either not been adjusted or were only adjusted fewer than twice in past years (with a 20% adjustment). In addition to modifying the anesthesia fees as an enhanced markup item for pediatric patients, the inpatient nursing fees for acute general ward and inpatient diagnostic fees were also increased by 3% and 13.5% respectively; a 20% markup for caring for people aged over 75, a 10% markup for outpatient diagnostic fees at night in district hospitals, and a 50% markup for emergency diagnostic fees by specialist physicians were added; the first-stage outpatient diagnostic fees in primary medical institutions were increased by 6 RVUs.

Guaranteeing the Relative Value Unit Value to Encourage Investment in the Healthcare Workforce

Human resources is the most valuable asset of healthcare facilities. However, medical professionals often complain that they have worked hard without getting the “affirmation” they deserve. Because the RVU value for medical professionals’ labor or machine output fluctuates in the same way under the NHI global budget payment system, it is no wonder that medical professionals are frustrated by how labor was undervalued. According to big data analysis, the examination-related proportion of costs has shown an increasing trend, whereas the cost of diagnosis carried out by medical professionals has gradually decreased.

As it is difficult to cultivate medical professionals, their efforts should not be overlooked by fluctuating RVU values in the global budget. Therefore, in addition to securing the RVU value for items such as operations and anesthesia, which are carried out mostly by medical professionals, the NHIA also guaranteed the RVU value for emergency and critical care in big hospitals and for the medical services provided at night and on holidays by small hospitals to realize the spirit of tiered medical care. The NHIA has secured NTD 1 billion and NTD 500 million for these two items respectively in 2021. Depending on the outcome of budget negotiation, in the future, the NHIA will endeavor to improve the overall medical environment step by step.

Establishment and Revision of Fee Schedule

After clinical medical professionals provide patients with medical services such as diagnoses, examinations and tests, treatment, surgery, and anesthesia, they are paid according to the “NHI Fee Schedule and Reference List for Medical Services” (hereinafter referred to as the Fee Schedule) by submitting a claim for medical costs to the NHIA under the categories of Western medicine, dental services, Chinese medicine, home care, psychiatric community rehabilitation, case payment, etc. The NHIA has continued to allocate budget for expansion and revision of treatment items to further reflect technological progress, clinical needs, and reasonable rewards for health professionals. At present, nearly 4,600 medical service items are included.

Fee Schedule Revision Procedure

Because the revision of the fee schedule involves the cost of medical institutions and the clinical practice considerations such as the efficacy, safety, and technical proficiency of each diagnosis or treatment, most revision proposals were submitted to the NHIA by medical institutions or related medical specialist associations. The application form includes Chinese and English names of new items, main clinical function and objectives, comparison with traditional diagnosis or treatment, estimated performing volume and NHI financial impact assessment; report with evidence-based data, cost analysis tables, operating procedures (including the number of hours invested by various medical professionals in each process) and supporting documents should also be submitted. After collecting relevant information and opinions from clinical professionals, and conducting comprehensive assessment, the NHIA submits proposals to the “Expert Consultation Meeting on NHI Fee Schedule and Reference List for Medical Services” for approval, and then to the “NHI Fee Schedule and Reference List for Medical Services Joint Committee” for discussion. After the members of the committee agree on whether to include an individual item in the benefits of the NHI, the NHIA submits the agreed items to the MOHW, which announces the effectiveness of the inclusions. The complete procedure and process are shown in Fig. 3.6 and Table 3.3.

Fig. 3.6
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Fee schedule revision procedure

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Table 3.3 Fee schedule revision process
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Health Technology Assessment

After the implementation of the second-generation NHI in 2013, Article 42 of the National Health Insurance Act stipulates that the insurer shall adapt the health technology assessment (HTA), and shall consider human health, medical ethics, cost-effectiveness of the treatment, and the financing of the National Health Insurance, to support the decision-making of the NHIA. Since 2013, the NHIA has started to carry out HTAs for costly medical technologies, medical treatments, and diagnosis items that have a large impact on NHI finance, require literature confirmation on its efficacy or in-depth domestic cost-effective analysis.

Over the years, the HTAs of nearly 40 medical services has been completed, and new medical technologies that brought better medical outcomes and were proven to be safer and more cost-effective than traditional treatments according to relevant evidence were included in the NHI benefits through the discussion of the “Expert Consultation Meeting on NHI Fee Schedule and Reference List for Medical Services” and the “NHI Fee Schedule and Reference List for Medical Services Joint Committee.” In total, five items are covered by the NHI currently, including “transcatheter insertion or replacement of permanent leadless pacemaker,” “molecular adsorbent recirculating system,” “vagus nerve stimulation,” “transcatheter aortic valve implantation,” and “bipolar transurethral resection/plasma vaporization of the prostate.” In addition, the surgical fees for “Da Vinci radical prostatectomy” and “Da Vinci robotic partial nephrectomy” are covered by the NHI as existing items (such as laparoscopy), whereas the medical devices remain out-of-pocket items.

The HTAs will continue to be conducted to support the decision-making on NHI payments. Furthermore, the NHIA will introduce “Health Technology Reassessment” for follow-up surveillance of the performance of diagnosis and treatment covered to ensure the quality of medical care and NHI financial stability.

Items Not Been Covered by the NHI

According to the fee schedule, when the NHI-contracted medical institutions provide medical services not listed in the fee schedule, they should submit the claim based on the RVUs of the most similar items in the relevant category. Therefore, when a medical institution carries out a treatment or diagnosis not covered by the NHI, it should claim the reimbursement following the corresponding table listed in the “Claiming Standards of Items Not Listed in the Fee Schedule for the Contracted Medical Institutions” published on the NHIA’s official website. For example, “left atrial appendage occlusion” should be claimed according to the current code 68005B “Cardiorrhaphy for heart wound or injury.” As for other items that are not listed in the corresponding table, they should be claimed by the medical institutions as the most similar items in the relevant category of the fee schedule.

In addition, when people seek medical care and receive medical treatment not covered by the NHI, except for the out-of-pocket items, the rest of the items that are already covered are still paid by the NHIA. For example, when people seek medical care owing to illness and agree to receive the out-of-pocket “high-intensity focused ultrasound” operation, except for the out-of-pocket costs of the operation and related medical consumables, other inpatient costs during this hospital stay (including consultation fees, ward fees, examination fees, medicine fees, anesthesia fees, etc.) can be claimed via the NHIA. As for the necessity or appropriateness of the surgical treatment, it should be determined by their professional judgment and will be reviewed by medical experts of the NHIA.

Self-Management Plan Under the Global Budget Payment System and Corresponding Measures of Insufficient Budgeting

Since its inception in 1995, the NHI inherited the payment system of the Government Employees’ Health Insurance and Labor Insurance, which reimburse medical expenses mainly in the “fee-for-service” system and supplemented by “case payment.” On the basis of fee-for-service, the overall medical expenditure has increased significantly from NTD 143.3 billion in the first year of the NHI to NTD 268.7 billion in 1998, which is almost doubled in just 4 years. Therefore, the NHIA has learned from developed countries such as Canada, Germany, and Australia, and implemented the global budget payment system in the dentist department in 1998. The global budget payment system was applied to the traditional Chinese medicine department and Western medicine clinics subsequently, as well as the hospital department in July 2002. The annual NHI medical expenses are negotiated and determined by the government, payers, experts, scholars, and medical service providers. The overall medical expenditure in 2020 has reached NTD 752.6 billion, a growth of 5.25 times in 25 years. After the implementation of the global budget payment system, when the growth of the global budget is less than that of the medical service volume, the value of each RVU is less than NTD 1, which means that the payment is the discounted. The medical professionals have often discussed this situation.

Self-Management Plan

In order to allocate the limited global budget appropriately, the NHIA optimizes the returned deducted medical reimbursement from abnormal cases for hospitals to reuse. Each division of the NHIA also establishes a co-management mechanism with hospital representatives within its jurisdiction to negotiate and formulate a “self-management plan,” which encompasses various cost control and quality assurance measures.

Subtracting Relative Value Units Directly

The NHIA divisions set the “target value of the RVU” through the abovementioned co-management mechanism and allocate the “hospital-specific global budget” to each hospital in advance. The NHIA divisions provide review exemption as an incentive for those hospitals that do not exceed the allocated quota to encourage self-management, hoping to avoid the devaluation of RVUs attributed to the significant growth in medical services. If the RVUs of medical services exceed the allocated quota, the excess will be subtracted directly or via a sampling rate in proportion with excess RVUs.

Sharing the Relative Value Unit Gap

Some divisions of the NHIA estimate the value of the RVU at the end of the quarter. If the estimated value of the RVU cannot reach the preset “target RVU value,” the differences between them will be shared by all hospitals. After negotiating special items (such as rare diseases, hemophilia, or anti-rejection medication after organ transplantation) and items that require guaranteed values, the hospitals share the gap of RVUs according to the “percentage of contribution to RVU growth” and “proportion of expenses,” so that the value of the RVU can reach the target. In this way, each hospital claims with the better priced RVUs to acquire reallocated medical expenses.

Analysis and Reflections

It has been more than 27 years since the implementation of the NHI. People in Taiwan have a high level of freedom in seeking medical care, and the expectation of receiving high-quality service with low payment is so deeply rooted that controlling the volume of medical services is quite difficult. In the past 20 years, the average RVU value in the hospital department has always been less than NTD 1 (Fig. 3.7).

Fig. 3.7
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The relative value unit value of global budget for hospitals from 2006 to 2019

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The operation methods of each NHIA division are introduced as follows:

  1. 1.

    NHIA: Taipei Division

Taking the NHIA-Taipei Division (the largest division, which includes Taipei, New Taipei, Keelung, Yilan, Kinmen, and Lianjiang’s six counties and cities) as an example, the annual difference between budget and claimed RVUs is as high as NTD 19.2 billion if the value of one RVU equates to NTD 1 in the past 5 years (Fig. 3.8). Using the aforementioned measures such as self-management, RVU subtraction, and RVU gap sharing, the Taipei Division barely maintains the value of one RVU to be higher than NTD 0.9. However, it is difficult to remunerate hospitals properly for the medical services they provide. This so-called “sweat hospital” phenomenon indicates the room for improvement in management measures.

  1. 2.

    NHIA: Northern Division

Fig. 3.8
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The relative value units claimed, budget, and difference in the NHIA Taipei Division (medical treatment business group)

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The approval process of RVU value and the quality improvement program for the global budget of the Northern District hospitals is described in Table 3.4.

  1. 3.

    NHIA: Central Division

Table 3.4 Approval process of relative value unit (RVU) value and the quality improvement program for the hospital global budget of the Northern District hospitals
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To safeguard the medical rights of the inhabitants of the area and protect the development of hospitals, the NHIA Central Division ensures reimbursement of five specific items by setting target RVUs for individual hospitals or overall quotas in the management program. The abovementioned items include long-term respirator usage management program, hospitals with quarterly claims under 36 million RVUs, RVUs for emergency triage classification level 1 or 2 and hospital stay for major trauma or cancer surgery, drug fee for outpatient and inpatient cancer chemotherapy, and single outpatient prescription for catastrophic illness with drug fee greater than 6000 RVUs. The Central Division refers to the original claim value of hospitals and peer claim value when formulating relevant management and control programs.

To prevent waste of medical resources while attaining service quality and rationality, the Central Division uses the unit price for outpatient and inpatient drug fees and nondrug fees as monitoring indicators. In addition, the quality indicators are integrated into the reward mechanism to improve the care quality of hospitals.

  1. 4.

    NHIA: Southern Division

The management methods of the NHIA Southern Division include “allocation in advance,” which means one’s voluntary compliance with the rules and “supervision afterward,” which means one’s compliance with the rules under others’ supervision. The “Risk Control and Quality Improvement Plan of the Hospital Global Budget RVU Value of the NHIA Southern Division” is a kind of allocation in advance, which encourages self-management of hospitals by setting a “hospital-specific global budget.” The overall execution structure is shown in Fig. 3.9 and described as follows:

  1. 1.

    The “hospital-specific global budget” and select a group

    1. A.

      According to the available budget and the target value of the RVU negotiated by the medical professionals, the Southern Division acquired the total number of RVUs to allocate. Then the “hospital-specific global budget” is formulated based on the proportion of each hospital’s base period and the composition of providers (the number of medical personnel). This is a kind of quantity management. As the medical expenses consist of price and quantity, the Southern Division must also control the unit price as well as the total amount. Therefore, the average drug fee and nondrug fee per person of the outpatient and inpatient clinics are managed based on their own comparison.

    2. B.

      Maintaining the stability of the RVU value is a responsibility shared by all hospitals. However, hospitals develop in different patterns, so the program is designed to encompass two groups, and each hospital can choose to join group A (self-management) or group B (nonself-management) according to its own development capacity.

  2. 2.

    Deduct the RVUs beyond target

    1. A.

      Group A self-manages within the budget and when the RVU claims exceed the upper limit of the target, the excess RVUs are subtracted directly. If the estimated RVU value is higher than the target value before settlement, the RVUs will be allocated back to group A for it is a contribution made by group A.

    2. B.

      A developing hospital in group B is likely to file more claims than the target RVUs. If the estimated RVU value is lower than the target value at the time of settlement, all hospitals in group B will share the total number of RVU differences, as group A has already taken the responsibility of subtracting the excessive RVUs. The growth in the number of patients cared for and the scope of claims is considered in the calculation and is excluded from the RVU deduction of group B.

    3. C.

      Both group A and group B need to execute unit price management reduction. In quarterly settlements, group A reduces RVUs down to the upper limit target as it already has a direct subtraction mechanism, and the insufficient part will be directly deducted from the target RVUs for the next year. As for group B, RVUs are reduced in the current quarter.

  3. 3.

    Redistribute equitably after weighting cost growth rate in the two groups

    1. A.

      To balance the responsibility of caring for the patients in these two groups, the Southern Division weighted the difference between the growth rate of the service volume and the supply volume of the two groups before settlement. When one group has much more growth rate than the other one, the budget would be redistributed to the other group to limit the difference of growth rate within 3%. The purpose is to prevent group A from reducing the provision of medical care owing to the financial risk, to ensure the well-being of patients, curb the buck passing, and prevent drastic differences in the net growth rate between the two groups.

Fig. 3.9
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Risk control and quality improvement program implementation framework of the hospital global budget relative value unit value in the NHIA Southern Division

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Although the Global Budget Payment System of the NHI can control the growth of national medical expenses, competition can easily occur among medical institutions, as the payment is based on the fee-for-service model. To prevent the interference of uncertain or low RVU values with hospital operations, all NHIA divisions adjust expenses according to their income and execute programs to stabilize the RVU values of the hospital global budget. The related implementation strategy is commonly known as the “hospital self-management plan.”

  1. 5.

    NHIA: Kaoping Division

The NHIA Kaoping Division provides information feedback to contracted institutions, intending to strengthen the management of institutions and reduce the medical waste. The NHIA understands that the medical RVUs would lead to medical waste and thus, it is necessary to continuously develop various global budget management strategies. The NHIA provides information from the National Health Insurance MediCloud System for medical institutions to inquire about patients’ medical treatment records across different hospitals and clinics. In addition, it can assist physicians in obtaining a thorough understanding of past test/examination results and the drug use status of patients. This system benefits physicians in making relatively more precise diagnoses and prescriptions while reducing the waste of medical resources due to repetitive prescriptions or repetitive examinations/tests. The NHIA also provides personal health information through My Health Bank system so that the public can strengthen self-health management, identify illegal behaviors of institutions and physicians via big data analysis, and promote self-improvement through information disclosure and feedback, which facilitates professional communication among peers while conducting precise reviews.

  1. 6.

    NHIA: Eastern Division

The structure of the “Professional Review for Hospital Global Budget in the Eastern Division” is based on the number of hospital management targets, the number of claims, and hospital income in the same period last year. The NHIA Eastern Division also calculates the number of quarterly management targets in each hospital with multiple adjustment factors such as adjustment of the RVU growth rate of medical expenses for outpatient, inpatient, emergency and critical care, and the number of patients. If the hospital controls the RVUs within the target, or agrees with subtracting the excessive part directly, then it is regarded as a self-management (A-level) hospital, which is exempt from random sampling reviews. A hospital that chooses to be a nonself-management (non-A-level) hospital will have to share the RVU gap when the estimated RVU value in the jurisdiction is lower than 92% of the target value. The Eastern Division has included the mechanism of the RVU gap sharing in the program since 2008 and executed it until now (the gap-sharing mechanism is activated if the estimated value is higher than 0.92 before settlement). Owing to the impact of the epidemic in 2020, the target RVU value in the Eastern Division is estimated with a floating formula, and the upper and lower limits are set at 0.92–0.96, whereas the range of 2021 is 0.92–0.94.

As the population risk factor and the referral percentage were used to adjust the allocation of the hospital global budget in 2017, the annual budget of the Eastern Division was reduced. Through unremitting efforts, the Eastern Division has been awarded the risk transfer fund since 2019 and set the principles for the use of the risk transfer fund with the hospitals in the jurisdiction jointly. To look after the disadvantaged and support remote areas, the NHIA East Division used more than 70% of the risk transfer fund for various projects, such as the diabetes care plan, hepatitis C, cancer, emergency medicine, remote wound care, and others; the rest of the budget was included in the target management allocation to compensate for the increased medical expenses of each program.

The complaints about self-management of the hospital global budget from the medical community are inevitable, and this is a plight that both the medical community and the NHIA are facing. The insufficient budget will certainly not only affect the medical service for patients, but will even affect the overall development of the country’s medical and related industries. For example, how will the value of the RVU respond to emergencies such as natural disasters, major accidents, or emerging infectious diseases? Besides supervising and balancing, payer representatives should face the concept of user fees squarely. Adjusting co-payment for the general public while protecting the economically disadvantaged may be a reform direction for the NHI.