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Abstract
Graduate Institute of Accounting
National Taiwan University
Title：A Study on Establishing the Early Warning System for
the National Health Insurance in Taiwan
Name：Yin-Jui Chen
Advisor：Shuen Zen Liu, Ph.D.
Month/Year：June, 1998
National Health Insurance, Early Warning System, and Accounting System
National Health Insurance(NHI) is a social program of immense
magnitude and will have a significant impact on the life of
every citizen in Taiwan. The purpose of the study is to propose
an early warning system for the Supervisory Commission of NHI
and wish the system can be used as a standard to monitor the
operations of the NHI.
In the first part of the study, we identify several problems on
the financial statements of Bureau of the NHI. For example, the
valuation of accounts receivable is not appropriate because of
the under-estimation of the bad debt expenses. Besides, the
difference between the reserve fund under cash basis and under
accrual basis is too large. This may affect the public*s
understanding of the insurer*s financial position.
In the second part of the study, we establish an early warning
system for the NHI. The system is divided into three broad
categories-liquidity tests, profitability tests and long term
early warning tests. We developed 16 key financial tests to
evaluate the financial performance of Bureau of National Health
Insurance, including current ratio, quick ratio, cash ratio,
accounts receivable turnover, return on the reserved fund,
medical expenses to the reserved fund, etc.
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