Bureau of National Health Insurance www.nhi.gov.tw Quality-Based Payment - Taiwan’s Experience Hong-Jen Chang, MD, MPH, MS CEO and President Bureau of.

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Bureau of National Health Insurance Quality-Based Payment - Taiwan’s Experience Hong-Jen Chang, MD, MPH, MS CEO and President Bureau of National Health Insurance Taiwan, June 6, 2004

Bureau of National Health Insurance

Background The NHI program since 1995 has successfully improved Taiwanese’s 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. “Taiwan’s new National Health Insurance program: genesis and experience so far,” Health Affairs 22, no. 3 (2003): Lu, J.R. and Hsiao, W.C., “Does universal health insurance make health care unaffordable? Lessons from Taiwan,” Health Affairs 22, no. 3 (2003):

Bureau of National Health Insurance 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. Healthcare’s quality-based compensation model,” Health Care Financing Review 17, no.3 (1996): 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):

Bureau of National Health Insurance

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

Bureau of National Health Insurance 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. “Taiwan’s new National Health Insurance program: genesis and experience so far,” Health Affairs 22, no. 3 (2003): Lu, J.R. and Hsiao, W.C., “Does universal health insurance make health care unaffordable? Lessons from Taiwan,” Health Affairs 22, no. 3 (2003):

Bureau of National Health Insurance

Overview of Taiwan NHI Payment System Fee for Services:major unit of payment –Costs claimed based on NHI Fee Schedules and Drug Price List Case Payment :50 disease categories Capitation:ventilator-dependent patients Quality-based Payment System:DM, Asthma,TB..etc Global budgets:dental care, traditional Chinese medicine, primary care, hospital care

Bureau of National Health Insurance 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 NHI Payment Reform

Bureau of National Health Insurance

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.

Bureau of National Health Insurance Quality DimensionIncentive DiseaseStructure Process Outcome Cervical Cancer 1. Volume of Pap Smear tests 2. Average monthly growth rate 1. Hospitals and clinics 2. Additional 10% ~50% of the current fee schedule is used as a bonus according to magnitude of the increase. TB Hospital qualification: at least 3 specialists in Chest, or Infectious diseases, or TB Departments. Physicians qualification: board certified chest, infectious disease, or TB specialists. Or physicians who has received special TB training from government health agencies. Practice guideline (3 periods) TB cure rates Additional payment reward: 1. Hospitals: $4,800 NTD/ TB case 2. Physicians: $950 NTD/ TB case Breast Cancer Hospital Qualification: 1.> 150 breast cancer surgeries per year 2. Existing practice guidelines or protocol for breast cancer treatments 3. at least 2 specialists in each of the Surgery, internal medicine, radiology, and pathology departments. 4. at least 1 specialist in each of plastic surgery, psychiatry, and rehabilitation departments. 5. Pre-intervention breast cancer patients database Practice guideline 1-5 year survival rates: 1. disease free survival rates 2. total survival rates Additional hospital reward: On average, $126,000 NTD/patient Asthma Physician qualification: 1. Physicians received asthma care training and certified by professional societies 2. Board certified specialists 3. Internists, pediatricians, and family doctors with asthma care experiences Practice guideline Additional physician reward: $1,200 NTD/patient/year Diabetes Hospital qualification: 1.cetified by county diabetic care networks 2. team: physician, nurse, and dietician Practice guideline Additional hospital reward: 1. $1,800 NTD/patient/year

Bureau of National Health Insurance

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

Bureau of National Health Insurance 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

Bureau of National Health Insurance Preliminary Results: Asthma Table 1: Medical services utilization of asthma participants in Taiwan before and after the Quality-Based Payment pilot program. ambulatory visits/patient E.R. visits/patient admission/patien t Before After Change Before: from April 01, 2001 to June 30, After: from April 01, 2002 to June 30, 2002.

Bureau of National Health Insurance 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).

Bureau of National Health Insurance

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.

Bureau of National Health Insurance 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.

Bureau of National Health Insurance Future Policy Direction Expand program scope to more diseases (Hypertension, hepatitis B&C, and schizophrenia) Include more outcome measures. Increase financial incentives Simplify administrative process Encourage provider participation Integrate with 2nd generation of health care reform project

Bureau of National Health Insurance 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.

Bureau of National Health Insurance

Thank you!