Health Care Payment Incentives: A Comparative Analysis of Reforms in Taiwan, Korea and China

Payment incentives have significant consequences for the equity and efficiency of a health care system, and have recently come to the fore in health policy reforms. This paper first discusses the economic rationale for apparent international convergence toward payment systems with mixed demand and supplyside cost sharing. We then summarize the recent payment reforms undertaken in Taiwan, Korea and China. Available evidence clearly indicates that incentives matter, and that supply-side cost sharing in particular can improve efficiency without undermining equity. Further study and monitoring of quality and selection is warranted. Acknowledgement. The authors thank the editors and an anonymous referee and for helpful comments. All remaining errors are our own.