National Health Insurance and Technology Adoption: Evidence from Taiwan


  • Shin-Yi Chou,

    1. Chou: Assistant Professor, Department of Economics, College of Business and Economics, 621 Taylor Street, Bethlehem, PA 18015-3117, and National Bureau of Economic Research, 365 Fifth Ave, 5th Floor, New York, NY 10016-4309. Phone 212-817-7975, Fax 212-817-1597, E-mail
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  • Jin-Tan Liu,

    1. Liu: Professor, Department of Economics, National Taiwan University, 21 Hsu-Chow Rd., Taipei, Taiwan, and National Bureau of Economic Research. Phone 886-2-2351-9641 ext. 570, Fax 886-2-2351-1576, E-mail
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  • James K. Hammitt

    1. Hammitt: Professor, Center for Risk Analysis and Department of Health Policy and Management, Harvard School of Public Health, 718 Huntington Ave., Boston, MA 02115-5924. Phone 617-432-4030, Fax 617-432-0190, E-mail
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Generous health-insurance coverage may encourage hospitals to acquire and employ more advanced medical technologies. The authors examine the effects of Taiwan's 1995 implementation of National Health Insurance on technology adoption, ownership, and use by comparing changes in adoption, ownership, and use rates by private hospitals with changes by public nonteaching and public teaching hospitals. Using random-effect panel probit and tobit models, the article finds strong empirical evidence that third-party payment increases the probability of technology adoption, ownership, and use. (JEL H4, I)