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This study examines the impact of Global Budget System on the medical utilization proxied by inpatient days and outpatient visits. I use hurdle regression to model the two-stage decision process occurred in medical utilization. In particular, a Logistic Regression analyzes patient’s initial visit, and Negative binomial Regression analyzes the magnitude of utilization. The sources of data used in this study were the Directorate-General of Budget, Accounting and Statistics. The summary statistics indicate that after the implementation of the Global Budget System the inpatient days increase by 1.83 days and outpatient visits increase by 5.68 times. However, after controlling household income and trend effect, the empirical results from our hurdle model indicate that the probability of incurring inpatient days decreases and the frequency of outpatient visits decreases conditional on positive use. Overall, the empirical results show that the medical utilization decreases after the implementation of the Global Budget System.
It can be seen after the implementation of the probability and frequency of visits has increased over time. It showed that the probability of visit and medical utilization has reduce, when the addition of age, income and other control variables. Overall, after Global Budget System implemented, the medical utilization had been reduced, and affect medical utilization. And the results were mostly significant.
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