Page 197 - 32.3

NTU Management Review
Vol. 32 No. 3 Dec. 2022, 187-224
DOI:10.6226/NTUMR.202212_32(3).0006

Earnings Management Behavior under the Global Budget
Payment and Reduction of Medical Expenses System: The Effects
of Different Types of Hospitals

總額支付及核減制度下醫院盈餘管理之研究：組織型態之
差異

Chan-Jane Lin, Department of Accounting, National Taiwan University
林嬋娟 / 國立臺灣大學會計學系
Hsiao-Yu Chen, Department of Accounting, National Taiwan University
陳孝宇 / 國立臺灣大學會計學系
Hsiao-Lun Lin, Department of Accountancy, National Taipei University
林孝倫 / 國立臺北大學會計學系
Received 2021/2, Final revision received 2022/5
Abstract
The current study examines earnings management behavior under the Global Budget
Payment and Reduction of Medical Expenses System across various types of hospitals
in Taiwan. Using 2013-2018 financial data available from the National Health Insurance
Administration, this study builds models to estimate the discretionary accruals (e.g., float-
point adjustment and allowance for National Health Insurance deduction) as proxies
for earnings management behavior of hospitals. Our results of regression indicate that
compared to medical juridical persons, private hospitals employ discretionary accruals to
reduce income to a larger extent when pre-managed earnings are high. This is possibly
due to that the income of a private hospital has to be combined with the personal income
of the physicians in charge of the hospital for taxes to be levied. Furthermore, the hospital
governance mechanism of private hospitals is less strict than that of medical juridical
persons. Our results also show that compared with medical care corporations, medical
care foundations use discretionary accruals to reduce income to a greater extent when
pre-managed earnings are high. The possible reason for this observation is that medical
care foundations, which are nonprofit hospitals, have incentives for mitigating excessive
monitoring due to high earnings. This study contributes to the extant literature by also
investigating the earnings management behavior of private hospitals and medical care
corporations in Taiwan. The second contribution is that this study finds besides “allowance
for National Health Insurance deduction,” hospitals also use discretionary “float-point
adjustment” accruals to manage earnings. The findings from this study offer policy
implications for regulators to consider revising the hospital governance policy, including
providing guidance for hospitals to estimate discretionary accruals.
【Keywords】earnings management, private hospitals, medical juridical persons, float-point
adjustment, NHI deduction

領域主編：黃心苑教授

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