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Abstract
In this paper, we estimate the demand for healthcare and explore the recent determinants of healthcare utilization under Taiwan’s national health insurance. Price elasticity and quality elasticity are estimated in order to evaluate the effectiveness of the copayment policy and the possible quantity reduction owing to quality improvement under the Global Budget Payment System. Our empirical results demonstrate that, first, the price sensitivity of patients is not high enough, therefore resulting in an ineffectiveness of the copayment policy to reduce healthcare utilization and, second, the quality sensitivity of patients is high enough that providers should deliver a higher quality of care and reduce the follow-up treatments in order to avoid an overprovision of healthcare services as a result of the design of the Global Budget Payment System.
Acknowledgements
The authors would like to thank the the anonymous referees for their constructive comments.
Ethical conduct of research
The authors state that they have obtained appropriate institutional review board approval or have followed the principles outlined in the Declaration of Helsinki for all human or animal experimental investigations. In addition, for investigations involving human subjects, informed consent has been obtained from the participants involved.
Financial & competing interests disclosure
The authors have no relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript. This includes employment, consultancies, honoraria, stock ownership or options, expert testimony, grants or patents received or pending, or royalties.
No writing assistance was utilized in the production of this manuscript.