Healthcare payment incentives: A comparative analysis of reforms in Taiwan, South Korea and China

Payment incentives to both consumers and providers have significant consequences for the equity and efficiency of a healthcare system, and have recently come to the fore in health policy reforms. This review first discusses the economic rationale for the apparent international convergence toward payment systems with mixed demand- and supply-side cost sharing. The recent payment reforms undertaken in Taiwan, South Korea and China are then summarised. Available evidence clearly indicates that payment incentives matter, and, in particular, that supply-side cost sharing can improve efficiency without undermining equity. Further study and monitoring of health service quality and risk selection is warranted. © 2004 Adis Data Information BV. All rights reserved.