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National health Insurance was instituted in 1995 in Taiwan. Over the last two decades, it had accomplished an impossible mission- over ninety percent of Taiwan’s population were enrolled, more than eighty percent overall general public satisfaction, and health expenditure including public health budget were merely 6.1% of the gross domestic product (GDP). It was indeed a Taiwan miracle. However, many problems had emerged; among these were financial crisis, and shortages of manpower in emergency and critical care medicine.
National health insurance administration introduced several tactics for effective cost containment in the face of escalating health expenditure. These included sampling review for payment subtractions and global budget system. The global budget payment system was initially applicable to dental clinics in 1998, and then expanded to traditional Chinese medicine clinics in 2000, followed by primary care providers in 2001, and finally to hospitals in 2002. Though it restrained the rapid increase in medical expenditure, there were wider influences on the whole infrastructure of health care systems. There was a rapid shrinkage of local hospitals, with expansion of the two extreme ends of healthcare providers, namely large enterprise founded hospitals and primary care clinics.
In 2010, another strategy to control financial expenditure was implemented stage by stage- inpatient Diagnosis Related Groups (DRGs). National health insurance administration’s original plan was to carry out inpatient DRGs payment system in five stages over five years. During implement of the first one and two stages, resistance came from medical professions who voiced that under the then ongoing global budget payment system, it was unreasonable to implement DRGs. But because these first two stages were carried out on mainly surgical and obstetric specialties, the resistance was relatively smaller. However, subsequent implementation of stages three, four and five includes internal medicine, which involves more complicated diseases with many variables. In particular, a majority of elderly people suffer from concurrent multiple disorders. Hospitals would face immense challenges ahead if there is no work flow procedure in place for effective delivery of medical service, and a stringent health quality management. The difficulties might include funding pressure to closure of hospitals in more serious cases. Looking at the United States of America, the number of hospital beds nationwide had dropped significantly following its implementation of DRGs
As regional hospitals do not have better buyer bargaining ability compared to large medical centers and their hospital running costs are high, the need for financial simulation to find out their weaknesses is paramount. A strategy to strengthen these weak areas may include the following three stages of inpatient care: (1) Confirm diagnosis- improve on scheduling of arrangement for investigations. (2) Treatment period- reinforce on provision of explanation and information on treatment plan, and reduce complications. (3) Discharge preparation stage- early intervention from case management nurse specialist, formulate standard operation procedure flow chart, and raise medical effectiveness.
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