Page 173 - 臺大管理論叢第33卷第1期

NTU Management Review Vol. 33 No. 1 Apr. 2023

1. Introduction

Population aging, extended life expectancy, changing health needs, and advances
in medical technology have all contributed to medical costs on the increase as well

as the potential abuse of medical resources (Partridge, Deelen, and Slagboom, 2018).
These problems have brought about the greatest challenges faced by countries that have
established National Health Insurance (NHI) systems (Cieza, Causey, Kamenov, Hanson,

Chatterji, and Vos, 2020; Ou, Chao, Hung, and Lin, 2012). For instance, according to the
2020 annual report by the Ministry of Health and Welfare (MHW) in Taiwan, the National
Health Expenditure (NHE) has reached NT$ 1,325 billion, accounting for 7.2% of gross
domestic product, and involving spending an average of NT$ 56,199 per capita (Ministry
of Health and Welfare, 2022). And to control for the substantial and rising medical care

expenses, Taiwan’s National Health Insurance Administration (NHIA) has established
multiple payment methods for medical providers, such as fee for service, capitation, global
budget, case payment and with a transition to the Diagnosis Related Groups (DRGs)

payment system since 2010. Moreover, the reform of the NHIA payment systems and the
economic competition among hospitals indeed require urgent attention from practitioners
and scholars, not only with regard to large-scale adaptation in hospital management, but
also in introducing appropriate tools to standardize the costs and procedures of medical
care.

The NHIA began large-scale implementing the case payment method in 1997 with
a view to reducing the continuously increasing medical expenses based on the fee-for-
service payment method. However, the implementation has inevitably transferred the cost

of patient care and financial pressure to medical service providers, especially for patients
with multiple comorbidities and high disease severity. In response to such revision,
hospitals have adopted several management control systems such as case management or
Clinical Pathways (CPs) to effectively reduce medical costs.
Clinical pathways (CPs) are novel medical management plans designed to standardize

medical activities, reduce cost, optimize resource usage, improve the quality of service
and increase patient satisfaction (De Bleser, Depreitere, De Waele, Vanhaecht, Vlayen, and
Sermeus, 2006). The CPs are intended to shorten the hospital stay and reduce healthcare

costs, which has become an increasingly important issue in medical practice. The CPs

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