How did the increase in NHI copayments in 2005 affect the use of health care?

Objectives: The aim of this study was to evaluate the impact of the increase in NHI copayments in 2005 on the choice and use of health care. Methods: We analyzed the outpatient utilization of one million NHI enrollees between 2004 and 2006. Because the policy increased only the copayment for hospital visits, it was plausible to expect that the effect would be smaller for individuals residing or working in towns with a lower propensity for visiting hospitals. Therefore, based on the average percentage of clinical care in the town of residence, the sample was separated into three groups: less than 65% (group I), between 65 and 75% (group II), and more than 75% (group III). We then used the Hurdle regression model to examine the effect of the new policy on the probability of health care utilization, and the number of outpatient visits for each group. Results: Our results showed that the increase in copayment significantly reduced the probability and the number of outpatient visits. We estimated that outpatient use six months after the policy change decreased by 0.34 visits (or 6.1%), of which 0.07 were visits to hospitals, and 0.01 were visits to regional hospitals or above. More importantly, the effect differed substantially across groups. Individuals residing or working in towns with a higher propensity to visit hospitals (group I) reduced their visits to hospitals after the policy change. On the other hand, individuals residing or working in towns with a lower chance of visiting hospitals (group 3) increased their visits. These findings were robust even after extending the sample period from six to 12 months. Conclusions: Our results confirmed that a copayment increase in 2005 reduced the use of outpatient services. Nonetheless, the effect differed substantially across groups with various propensities to make hospital visits. One explanation might be that there is a capacity constraint that limits outpatient services offered by hospitals. While individuals residing or working in towns near hospitals reduced their hospital visits due to the price hike, those residing or working in more distant towns increased their hospital visits.