Global Budget Payment System Research Articles

Kesiapan Rumah Sakit Dalam Implementasi Sistem Pembayaran Global Budget Di Kabupaten Purworejo

The Global Budget payment method was adopted because of the annual increase in healthcare costs, which requires for cost control to guarantee that expenditures are reasonable and resources are distributed fairly without reducing the standard of service. A global budget system provides hospitals the flexibility to utilize the budget to enhance healthcare while also providing financing stability for a predetermined period of time. In 2018, BPJS Kesehatan initiated a pilot project to integrate the INA CBGs and Global Budget mixed-method hospital payment system (global budget). Purworejo Regency is one of the areas designated as a pilot for the Global Budget payment system's deployment. The outcomes of the Hospital performance indicators in the first semester review were less than ideal. As a consequence, it is required to conduct study into the Hospital's readiness to implement the Global budget Payment System. A descriptive design and a qualitative methodology were used in the research. The management of four hospitals in Purworejo Regency is the topic of the study. Observations and interviews were used to explore the readiness of hospitals in implementing the Global Budget payment system in terms of health facilities perception, Quality Control and Cost Control strategies, Global Budget calculations, and patient satisfaction through the results of the Walk Through Audit. Through the four key variables mentioned above, the scoring technique is used to evaluate the readiness of hospitals to implement the Global Budget payment system. The modified CCCEAR (California Community Clinic EHR Evaluation and Readiness) tool is used for the readiness assessment, which has three readiness levels: 1) not ready (score 0-33), 2) moderately ready (34-66), and 3) definitely ready (67-100). Result : According to a qualitative examination of data from observations and interviews, the hospital received scores of 26 from assessor II and 24 from assessor I, positioning it in the second range. This demonstrates that the hospital fits into the category of being not ready and that it has not considered about developing a more comprehensive and in-depth plan for implementing the Global Budget payment system as well as how to create capacity to enable successful adoption and implementation. Conclusion : The hospital is not yet at its highest level of readiness to proceed with adopting the Global Budget payment system in Purworejo Regency, according to the findings of scoring on four variables of hospital readiness.

The mid-to-long term reform plan for the global budget payment system of National Health Insurance

The mid-to-long term reform plan for the global budget payment system of National Health Insurance

Evaluation of Length of Stay, Care Volume, In-Hospital Mortality, and Emergency Readmission Rate Associated With Use of Diagnosis-Related Groups for Internal Resource Allocation in Public Hospitals in Hong Kong

Hong Kong's internal resource allocation system for public inpatient care changed from a global budget system to one based on diagnosis-related groups (DRGs) in 2009 and returned to a global budget system in 2012. Changes in patient and hospital outcomes associated with moving from a DRG-based system to a global budget system for inpatient care have rarely been evaluated. To examine associations between the introduction and discontinuation of DRGs and changes in length of stay, volume of care, in-hospital mortality rates, and emergency readmission rates in the inpatient population in acute care hospitals overall, stratified by age group, and across 5 medical conditions. This cross-sectional study included data from patients aged 45 years or older who were hospitalized in public acute care settings in Hong Kong before the introduction (April 2006 to March 2009), during implementation (April 2009 to March 2012), and after discontinuation (April 2012 to November 2014) of the DRG scheme. Data analysis was conducted from January to June 2021. Public hospitals transitioned from a global budget payment system to a DRG-based system in April 2009 and returned to a global budget system in April 2014. The main outcome was the association of use of DRGs with patient-level length of stay, in-hospital mortality rate, 1-month emergency readmission rate, and population-level number of admissions per month. An interrupted time series design was used to estimate changes in the level and slope of outcome variables after introduction and discontinuation of DRGs, accounting for pretrends. This study included 7 604 390 patient episodes. Overall, the mean (SD) age of patients was 68.97 (13.20) years, and 52.17% were male. The introduction of DRGs was associated with a 1.77% (95% CI, 1.23%-2.32%) decrease in the mean length of stay, a 2.90% (95% CI, 2.52%-3.28%) increase in the number of patients admitted, a 4.12% (95% CI, 1.89%-6.35%) reduction in in-hospital mortality, and a 2.37% (95% CI, 1.28%-3.46%) decrease in emergency readmissions. Discontinuation of the DRG scheme was associated with a 0.93% (95% CI, 0.42%-1.44%) increase in the mean length of stay and a 1.82% (95% CI, 1.47%-2.17%) reduction in the number of patients treated after adjusting for covariates; no statistically significant change was observed in in-hospital mortality (-0.14%; 95% CI, -2.29% to 2.01%) or emergency readmission rate (-0.29%; 95% CI, -1.30% to 0.71%). In this cross-sectional study, the introduction of DRGs was associated with shorter lengths of stay and increased hospital volume, and discontinuation was associated with longer lengths of stay and decreased hospital volume. In-hospital mortality and emergency readmission rates did not significantly change after discontinuation of DRGs.

Impact of global budget combined with pay-for-performance on the quality of care in county hospitals: a difference-in-differences study design with a propensity-score-matched control group using data from Guizhou province, China

BackgroundProvider payment system has a profound impact on health system performance. In 2016, a number of counties in rural Guizhou, China, implemented global budget (GB) for county hospitals with quality control measures. The aim of this study is to measure the impact of GB combined with pay-for-performance on the quality of care of inpatients in county-level hospitals in China.MethodsInpatient cases of four diseases, including pneumonia, chronic asthma, acute myocardial infarction and stroke, from 16 county-level hospitals in Guizhou province that implemented GB in 2016 were selected as the intervention group, and similar inpatient cases from 10 county-level hospitals that still implemented fee-for-services were used as the control group. Propensity matching score (PSM) was used for data matching to control for age factors, and difference-in-differences (DID) models were constructed using the matched samples to perform regression analysis on quality of care for the four diseases.ResultsAfter the implementation of GB, rate of sputum culture in patients with pneumonia, rate of aspirin at discharge, rate of discharge with β-blocker and rate of smoking cessation advice in patients with acute myocardial infarction increased. Rate of oxygenation index assessment in patient with chronic asthma decreased 20.3%. There are no significant changes in other indicators of process quality.ConclusionsThe inclusion of pay-for-performance in the global budget payment system will help to reduce the quality risks associated with the reform of the payment system and improve the quality of care. Future reform should also consider the inclusion of the pay-for-performance mechanism.

The pilot of a new patient classification-based payment system in China: The impact on costs, length of stay and quality

With the urgent need to regulate provider behaviors, China developed a novel patient classification with global budget payment system, expecting to achieve both easy implementation and cost containment. The new system, called “diagnosis-intervention packet (DIP)” payment, is based on a deterministic patient classification approach, which groups patients according to the combination of principal diagnosis ICD-10 (International Classification of Diseases, 10th Revision) codes and procedure ICD-9-CM3 (International Classification of Diseases, 9th Revision, Clinical Modification) codes and links each group to relative historical costs market-wide. This study investigated the impact of the DIP-based payment on inpatient costs, length of stay, and quality of care in the largest DIP pilot city of China. In 2018, the city changed from the “fixed rate per admission with a cap on annual total compensation” policy to DIP with global budget for all insured inpatients. A difference-in-differences approach was employed to identify changes in outcome variables before and after the DIP policy among insured relative to uninsured patients. We found an average of 8.5% (p = 0.000) increase in inpatient costs per case (as intended), trivial changes in length of stay, and a 3.6% (p = 0.046) reduction in postoperative complication rate in response to DIP adoption among patients with high severity. Our findings suggested that the DIP-based payment helped regulate provider behaviors when treating high-risk patients. And the new payment has the potential for rapid rollout in resource-limited areas where lack a uniform coding practice or high-quality historical data.

Comparison of the Charges of 10 Selected Surgeries in Imam Reza Hospital, Mashhad City, Iran, With Their Official Global Prices

Background: This descriptive, analytic study aimed to compare the costs of 10 types of Global Budget Payment System (GBPS) surgery in Imam Reza Hospital, Mashhad City, Iran, in 2016 with the prices in the GBPS. Methods: From hospital-discharge data and patients’ bills, we identified 10 types of GBPS surgeries performed in Imam Reza hospital. The patients were grouped according to the surgical procedures performed in the 10 GBPS category. Data on hospital charges and cost-to-charge ratios were used to assess charges and costs for specific resources, as well as for the hospitalization overall. The researcher received training from the experts in the field of hospital accounting to learn how to determine the charge of GBPS surgeries. Results: The results showed that in some surgeries such as hysterectomy, natural delivery, C-section, tonsillectomy, hernia repair, and appendectomy, charges of services were higher than their average prices GBPS and in arteriovenous anastomosis surgery, cholecystectomy, tympanoplasty, and thyroidectomy were lower than average prices GBPS. One of the main goals of Iran’s Ministry of Health in developing GBPS was to provide a unified framework for managing admission and treatment costs in state-owned hospitals. The obtained data were analyzed by the Wilcoxon signed-rank test and the independent samples t test with 0.05 statistical significance. The results of this study and similar works show that most hospitals have completely neglected this aspect of GBPS. Conclusion: A fact that is reflected in the wide-ranging variations in the charge of GBPS surgeries in different hospitals despite their being paid based on the same rates and guidelines.

Utilization and expenses of outpatient services among tuberculosis patients in three Chinese counties: an observational comparison study

BackgroundThe China-Gates TB project Phase II implemented case-based payment reform in three Chinese counties in 2014, designed specifically for patients diagnosed with Tuberculosis (TB). This study aimed to examine the changes in utilization and expenses of outpatient services before and after the reform implementation, among TB patients in the three counties in China.MethodsWe collected quantitative data using surveys in 2013 (baseline year) and 2015 (final year). We used outpatient hospital records to measure service utilization and medical expenses of TB patients. We conducted qualitative interviews with local health authorities, officers of health insurance agencies, and hospital managers (n = 18). We utilized three focus group discussions with hospital staff and TB doctors and nurses. The χ2 tests and Mann-Whitney U tests were used to analyse quantitative data, and the thematic analysis using a framework approach was applied to analyse qualitative data.ResultsDantu and Yangzhong counties enacted TB-specific case-based payment method in 2014. Jurong County maintained global budget payment but raised the reimbursement rate for TB care. Compared to the baseline, the percentage of TB patients in Dantu and Yangzhong with eight or above outpatient visits increased from 7.5 to 55.1% and from 22.1 to 53.1% in the final survey, respectively. Jurong experienced the opposite trend, decreasing from 63.0 to 9.8%. In the final survey, the total outpatient expenses per patient during a full treatment course in Dantu (RMB 2939.7) and Yangzhong (RMB 2520.6) were significantly higher than those in the baseline (RMB 690.4 and RMB 1001.5, respectively), while the total outpatient expenses in Jurong decreased significantly (RMB 1976.0 in the baseline and RMB 660.8 in the final survey). Health insurance agencies in Dantu and Yangzhong did not approve the original design with outpatient and inpatient expenses packaged together, revealed by qualitative interviews. Furthermore, staff at designated hospitals misunderstood that health insurance agencies would only reimburse actual expenses. Many TB doctors complained about their reduced salary, which might be due to decreased hospital revenue generated from TB care after the payment method reform.ConclusionsThe intended effect on cost containment of case-based payment was not evident in Dantu and Yangzhong. In Jurong, where the global budget payment system maintained with the reimbursement rate enhanced, we found an effect on cost containment, but the quality of TB care might be compromised. The TB-specific case-based payment method could be redesigned to combine payment on outpatient and inpatient expenses and to set an appropriate payment standard for TB care during a full treatment course. Local health insurance agencies have to provide explicit explanations on the payment method. TB care providers should be provided with proper incentives. Monitoring and evluaiton on the quality of TB care should be undertaken at regular intervals.

Impact of the Global Budget Payment System on Expenditure of Cardiovascular Diseases: An Interrupted Time Series Analysis in Shanghai, China.

Since few studies evaluated the impact of the global budget payment system (GBPS) over time, and by expenditure type, this paper aims to evaluate the impact of the GBPS on expenditure of inpatients, and explores how hospitals curb the expenditure in patients with cardiovascular diseases (CVDs) in Shanghai. We built a time series model with the monthly expenditure of CVDs from 2009 to 2012. We evaluated the instant impact and trends impact of the GBPS and analyzed results based on medical expenditure types (e.g., drug, examination, cure, unclassified items), discharge number, and expenditure per capita. We found GBPS instantly dropped the medical expenditure by Chinese Yuan (CNY) 55.71 million (p < 0.001), and decreased the monthly increasing trend by CNY 4.23 million (p = 0.011). The discharge number had 10.4% instant reduction and 225.55 monthly decrease (p = 0.021) while the expenditure per capita experienced fewer changes. Moreover, the expenditure of drug and cure had an instant reduction of CNY 28.31 million and 16.28 million (p < 0.001). In conclusion, we considered the GBPS is an effective solution to control the expenditure of CVDs by decreasing the discharge number, and a focus on the drug and cure expenditures lead to greater spend reduction than other types of expenditures.

Global budget payment system helps to reduce outpatient medical expenditure of hypertension in China.

BackgroundAs healthcare spending continues to increase, medical insurance is now under great pressure of growing economic burden. To control the excessive growth of medical expenditure, change of medical payment system was clearly put forward in China’s new healthcare reform. With this end, Tianjin, a large city in North China, is now exploring to replace traditional fee-for-service (FFS) with global budget payment system (GBPS), and actual effects of GBPS needs to be assessed.MethodsData of this study is from the 2013 National Health Services Utilization Survey among patients of Urban Basic Medical Insurance in China, containing 102,492 outpatient visits of 21,925 hypertensive patients to Tianjin’s primary hospitals in 2013. t test was used to compare the difference between continuous variables. A linear regression analysis was also done to identify possible risk factors of medical expenditure.ResultsOn the basis of expenditure per capital, GBPS, compared with FFS, has significantly reduced total medical expense (CNY 640.28 vs. CNY 700.64, p < 0.001), medical insurance (MI) fund expense (CNY 491.87 vs. CNY 532.37, p < 0.001) and out-of-pocket (OOP) expense (CNY 148.42 vs. CNY 168.27, p < 0.001). Results of generalized linear regression also show that younger people, female and GBPS independently predict less total medical expense, MI fund expense and OOP expense.ConclusionsCompared with FFS, GBPS can help reduce total medical expense, MI fund expense and OOP expense significantly. This study offers evidence for wider implementation of GBPS in China.

Web-based and telephone surveys to assess public perception toward the national health insurance in taiwan: a comparison of cost and results.

BackgroundNumerous studies have examined the impact of global budget payment systems of health insurance on patient access to medical care. In order to monitor the population’s accessibility to health services, a series of survey are often used to understand public perceptions of the health care provider. Taiwan implemented the single-payer National Health Insurance in 1995 and has been conducting a series of surveys to monitor public perception of the NHI after adopting a global budget payment system in 2002. Although telephone surveys are commonly used in obtaining public opinions on various public health issues, limitations such as higher cost and influence of interviewers do raise some concerns. Web-based surveys, one of the alternative methods, may be free from these problems.ObjectiveOur aim was to examine the difference of sociodemographic characteristics, satisfaction of NHI and NHI-contracted health care providers, attitude toward NHI-related issues, behavior in seeking medical advice and self-reported health status between those who completed Web-based surveys and those reached by telephone.MethodsThis study compared the demographic factors of participants who took either a Web-based survey (1313 participants) or random digit dialing telephone survey (2411 participants) that contained identical questions.ResultsCompared to telephone survey respondents, Web-based respondents tended to be younger (P<.001), unmarried (P<.001), non-smokers (P<.001), with a higher education (P<.001), and a higher monthly household income (P<.001) and worse self-reported health status (P=.008); however, they were less likely to report suffering from a chronic disease (P<.001). Despite these differences in background characteristics, no significant differences were observed in their answers related to the seeking of medical care or NHI-related issues. Telephone survey respondents reported greater satisfaction with NHI services. Web-based surveys were also shown to provide a lower average cost per sample (US$0.71) compared to telephone surveys (US$3.98).ConclusionsWeb-based surveys provide a low-cost alternative method for the polling of public attitudes toward NHI-related issues. Despite general similarities between the two polling methods with regard to responses, respondents to telephone surveys reported a stronger agreement with regard to satisfaction with NHI services and a more positive self-reported health status.

Strategic Provider Behavior Under Global Budget Payment with Price Adjustment in Taiwan.

Global budget payment is one of the most effective strategies for cost containment, but its impacts on provider behavior have not been explored in detail. This study examines the theoretical and empirical role of global budget payment on provider behavior. The study proposes that global budget payment with price adjustment is a form of common-pool resources. A two-product game theoretic model is derived, and simulations demonstrate that hospitals are expected to expand service volumes, with an emphasis on products with higher price-marginal cost ratios. Next, the study examines the early effects of Taiwan's global budget payment system using a difference-in-difference strategy and finds that Taiwanese hospitals exhibited such behavior, where the pursuit of individual interests led to an increase in treatment intensities. Furthermore, hospitals significantly increased inpatient service volume for regional hospitals and medical centers. In contrast, local hospitals, particularly for those without teaching status designation, faced a negative impact on service volume, as larger hospitals were better positioned to induce demand and pulled volume away from their smaller counterparts through more profitable services and products such as radiology and pharmaceuticals.

Implications of global budget payment system on nursing home costs

Pressure on health care systems due to the increasing expenditures of the elderly population is pushing policy makers to adopt new regulation and payment schemes for nursing home services. We consider the behavior of nonprofit nursing homes under different payment schemes and empirically investigate the implications of prospective payments on nursing home costs under tightly regulated quality aspects. To evaluate the impact of the policy change introduced in 2006 in Southern Switzerland – from retrospective to prospective payment – we use a panel of 41 homes observed over a 10-years period (2001–2010). We employ a fixed effects model with a time trend that is allowed to change after the policy reform. There is evidence that the new payment system slightly reduces costs without impacting quality.

Consumption of national health insurance medical resources by hepatocellular carcinoma patients treated using radiofrequency ablation therapy

This study analyzed the health-care resources consumed in cancer treatment to provide important reference guidance to national governments with regard to their health-care policy prioritization and efficient health-care resource allocation. Researchers used a retrospective observational approach to study medical resources consumed by hospitalized hepatocellular carcinoma (HCC) patients who underwent radiofrequency ablation (RFA) treatment in Taiwan between 2002 and 2006. A systemic analysis of the results showed a mean patient age of 65.3 and average medical costs per patient of US$1403. Higher incidence of HCC was evident in rural areas in Taiwan, however smaller hospitals treated fewer patients diagnosed with HCC due to many patients seeking treatment at larger hospitals, usually in urban areas. Consumption of medical resources at regional hospitals was significantly higher than at medical centers in terms of costs of X-rays and special materials as well as for the overall cost of treatment (P < 0.001). The average medical costs for hospitalized cancer patients who underwent RFA treatment were lower than for those that received other treatments such as surgical resection, TACE, radiotherapy or chemotherapy. This study further found an upward trend in the number of HCC patients receiving RFA treatments. Taiwan operates a national insurance global budget payment system. Health-care system budgetary pressures are exacerbated by increases in the costs of cancer treatment. While the cost of RFA for HCC may represent value for money, with cost savings in other treatment areas, it nonetheless places strain on Taiwan NHI global budget payment system.

The determinants of health expenditures in Taiwan: modeling and forecasting using time series analysis

In this study, the determinants of per capita health expenditures in Taiwan are investigated. Per capita health expenditures over the period from March 1996 to December 2006 are examined using autoregressive (AR) model in order to analyze whether prior health expenditures can explain current health expenditures. In particular, we examine the effects of both supply-and demand-side incentive mechanisms, i.e., the global budget payment system and the co-payment system, on health expenditures. We find the key determinants of Taiwan’s per capita health expenditures are the prior one month health expenditures, bed supply per capita, real gross domestic product (GDP) per capita and standardized mortality ratio (SMR). In addition, we also verified that the new copayment system could reduce health expenditures effectively. The ageing of population, which usually believed to influence health expenditures, is found to be non-significant. Moreover, the global budget payment system seemed to have an insignificant effect on controlling over utilization of medical resources.

The demand for healthcare under Taiwan’s national health insurance: a count data model approach

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.

Hospital non-price competition under the Global Budget Payment and Prospective Payment Systems

This paper provides theoretical analyses of two alternative hospital payment systems for controlling medical cost: the Global Budget Payment System (GBPS) and the Prospective Payment System (PPS). The former method assigns a fixed total budget for all healthcare services over a given period with hospitals being paid on a fee-for-service basis. The latter method is usually connected with a fixed payment to hospitals within a Diagnosis-Related Group. Our results demonstrate that, given the same expenditure, the GBPS would approach optimal levels of quality and efficiency as well as the level of social welfare provided by the PPS, as long as market competition is sufficiently high; our results also demonstrate that the treadmill effect, modeling an inverse relationship between price and quantity under the GBPS, would be a quality-enhancing and efficiency-improving outcome due to market competition.

Influences of market competition on dental care utilization under the global budget payment system

The degrees of market competition usually influence providers' behaviors. This study investigated the influence of medical market competition on the utilization of dental care under the global budget payment system. This study also examined the relative factors that influence the utilization of dental care. This study used the healthcare sub-regions (HCSRs) in the healthcare net as the observation units. The dataset was the National Health Insurance dental care claim data from 1999 to 2002. The degree of market competition of dental care was measured by the Herfindahl Index (HI). The influences of medical market competition on the utilization of dental care were analyzed by multiple linear regression analysis. When the market had a higher degree of competition, people had a higher number of dental utilizations after controlling for the other variables. When market competition increased by 1%, annual expenditures and frequencies of dental care as well as frequencies of tooth-filling per person increased by 0.4%. Thirty-three percent of dental expenditures could be explained by increases in the degree of market competition. Females or highly educated people had a positive correlation with dental utilization. However, the agricultural population negatively correlated with dental utilization. Average household income had no significant relationship with the frequency of dental care but had a significant negative association with dental expenditures when dental care was covered by health insurance. After the global budget payment system for dental care was implemented, increases in dental care market competition led to the increase in utilization of dental care services.

Adverse pharmaceutical payment incentives and providers' behaviour: the emergence of GP-owned gateway pharmacies in Taiwan

We investigated whether a 2002 pharmaceutical payment reform policy, which provided adverse incentives, fostered an increase in market share of 'gateway pharmacies' (G-pharmacies--pharmacies owned, operated and located by the same clinics that prescribe medicines); what the financial impact of G-pharmacies to the clinics is; and what factors determine whether a clinic decides to open a G-pharmacy. Using the database of the National Health Research Institutes, we collected secondary data on all of Taiwan's National Health Insurance prescription claims from pharmacies and clinics between 1997 and 2003. A G-pharmacy was defined as a pharmacy in which more than 70% of the prescriptions it filled came from the same clinic, which prescribed at least 900 prescriptions monthly, more than 70% of which were released to the pharmacy. Trend plot and frequency were used to analyse the distribution of G-pharmacy data. Logistic regression was used to explore what factors determined whether a clinic decided to open a G-pharmacy. After the 2002 reform, the percentage of total prescriptions filled by G-pharmacies reached 78.71%, the increase in percentage (15.23%) was the highest ever and significant (P < 0.01). The reform's adverse payment incentives resulted in a loss of NT$1.86 billion New Taiwan dollars to all clinics and resulted in a reduction in Taiwan's 2003 fee schedules under the global budget payment system. The decision to establish a G-pharmacy was associated with a clinic's being located in less urbanized areas, being a group practice, having higher patient volumes, being a general practitioner, and being privately owned. The 2002 reform's adverse incentive fostered a significant increase in the market share of G-pharmacies, and reduced the earnings of clinics which did not own them. It is necessary to break the link between profits from pharmaceutical sales and physician prescribing behaviour to prevent the conflict of interest in how medicines are prescribed.

Impacts of Cost Containment Strategies on Pharmaceutical Expenditures of the National Health Insurance in Taiwan, 1996???2003

Pharmaceutical expenditure (PE) of the National Health Insurance (NHI) programme in Taiwan grew from 62.2 billion Taiwan new dollars (NT dollars) in 1996 to NT94.5 dollars billion in 2003.The government has been introducing many strategies to control PE since the inception of NHI including price adjustment based on the prices of international products or existing products (inter-brands comparison), or market price and volume survey; delegation of financial responsibility to regional bureaux; co-payment for outpatient drugs; generic grouping (the reference pricing scheme based on chemical equivalence); a global budget payment system for clinics and hospitals; and reduction in the flat daily payment rate of the drugs for clinics. The aim of this study was to evaluate the impact of these cost containment strategies on the PE of the NHI programme from 1996 to 2003. To take the growth and seasonal trends of monthly PE into consideration, Box and Tiao's time-series event intervention analysis based on the Box-Jenkins auto-regressive integrated moving-average model was applied to evaluate the impact of various cost containment strategies on total and subsector (outpatient, inpatient, clinic and hospital sectors) PE. Monthly data of PE of the NHI programme from 1996 to 2003 (the dependent variables) were obtained from the Bureau of the NHI. Drugs prescribed by dentists and Chinese medical doctors at outpatient departments were excluded. After fitting the patterns of time series and controlling for the calendar effect of the Chinese New Year and the severe acute respiratory syndrome outbreak in 2003, three strategies (generic grouping, delegation of financial responsibility and reduction of the flat payment rate of clinics) were significantly associated with a reduction in PE. However, the hospital global budget strategy offset partial savings from these three strategies. Cumulative savings during the study period were estimated to be NT25.442 dollars billion (US0.80 dollars billion). Of all the strategies, generic grouping was the most effective although it had less effect on the clinic subsector. Neither drug co-payment nor price adjustment based on the international or inter-brand price comparison had significant impacts on PE. Generic grouping, reduction of the flat payment rate and delegation of financial responsibility were effective in controlling PE. A global budget alone would be unable to control PE without other direct financial incentives. Neither drug co-payment nor brand-specific price adjustment based on prices of international/existing products had a significant impact on PE.