Effects of a global budget payment scheme on medical specialty workforces
1Department of Economics, Tunghai University, No. 1727, Section 4, Taiwan Boulevard, Xitun District, Taichung City, 40704, Taiwan.
Insights
Global budgets aim to control healthcare costs but may reduce physician specialty choices. A Taiwan study found surgeon numbers dropped 25% under this system, impacting workforce composition.
Area of Science:
- Health Economics
- Healthcare Policy
- Medical Workforce Studies
Background:
- Rising healthcare costs necessitate innovative cost-containment strategies.
- Global budgeting is a proposed mechanism to manage healthcare expenditures.
- Potential impacts on medical specialty workforce composition require investigation.
Purpose of the Study:
- To analyze the unintended consequences of global budgeting on the medical specialty workforce.
- To assess the effect of global budgeting on physician specialty selection and retention.
Main Methods:
- Utilized a synthetic control method for empirical analysis.
- Examined changes in physician specialty distribution in Taiwan following the implementation of a global budget scheme.
Main Results:
- The number of surgeons in Taiwan decreased by 25% after 11 years under the global budget.
- The overall number of practicing physicians decreased by 13% during the same period.
- High-revenue service specialties experienced greater profit reductions, influencing career choices.
Conclusions:
- Global budgeting may disincentivize high-revenue medical specialties, leading to workforce shortages.
- Physician retention may be affected due to reduced profitability.
- Policymakers should consider workforce composition when implementing global budget systems.
Abstract:
Containing rising health care costs by a global budget offers promise, but might have unintended effects on the composition of medical specialty workforces. When a budget is given to a group of medical providers and the physician/population ratio is growing, the ex-post total sum of fee units would exceed the ex-ante budget, thereby reducing the reimbursement for all services for all providers. Furthermore, the profit of high revenue services drops more than the profit of low revenue services. Thus, medical school graduates are less likely to choose a specialty with high revenue in response to the global budget scheme and physicians may leave labor force earlier because of lowered profit. The author provides empirical evidence by a synthetic control method that the number of surgeons in Taiwan has exhibited a decrease of 25% after 11 years of Taiwan's global budget scheme. During that same period of time, the total number of practicing physicians decreased only 13%.
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