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Using a population-based database to explore the inter-specialty

differences in physician practice incomes in Taiwan

Herng-Ching Lin

a,∗

, Senyeong Kao

b

, Chao-Hsiun Tang

a

, Wen-Yin Chang

c aTaipei Medical University, School of Health Care Administration, 250 Wu-HsingStreet, Taipei 110, Taiwan

bNational Defense Medical Center, School of Public Health, Taipei, Taiwan cGraduate Institute of Nursing, Taipei Medical University, Taipei, Taiwan

Abstract

Gaining an understanding of the distribution of physician incomes between different medical specialties could assist poli-cymakers to predict the future medical manpower supply. The purpose of this study is to examine the differences in medical specialty-specific gross practice incomes between office-based physicians in Taiwan. The primary data source for the study, which includes 7444 office-based physicians, was provided by the Taiwan Department of Health, with the dependent variable of interest to this study being the annual gross income of physician practices, whilst the independent variable is physician specialty. The study controlled for physicians’ age, gender, specialty-board status, type of practice, location of clinic and urbanization level of the community in which the practice was located. Multivariate regression analyses were carried out to explore the relationship between physician specialty and gross practice income.

This study finds a significant relationship between the annual gross income of physician practices and the physician’s medical specialty (P < 0.001). Of all physicians, those specializing in rehabilitation and orthopedics had the highest gross practice incomes; conversely, obstetricians and gynecologists had the lowest gross practice incomes. The regression analyses demonstrated that after adjusting for socio-demographic and professional characteristics, gross practice incomes of physicians were significantly related to their medical specialty.

This study concludes that differences in the gross practice incomes of physicians were significantly related to medical spe-cialties. Those physicians specializing in procedure-based specialties, such as rehabilitation and orthopedics, had higher practice incomes than their counterparts in other more diagnosis-oriented specialties such as family practice and pediatrics.

© 2004 Elsevier Ireland Ltd. All rights reserved.

Keywords: Physician incomes; Medical specialty; Office-based physicians

Corresponding author. Tel.: +886 2 2345 2506x13; fax: +886 2 2378 9788.

E-mail address: henry11111@tmu.edu.tw (H.-C. Lin).

1. Introduction

The relationship between physician incomes and the distribution of medical specialties continues to be an issue of national interest. Inter-specialty differences in income may not only influence medical specialty ca-0168-8510/$ – see front matter © 2004 Elsevier Ireland Ltd. All rights reserved.

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254 H.-C. Lin et al. / Health Policy 73 (2005) 253–262 reer choices[1–3], but may also drive some physicians

from their current practices to other, more lucrative, medical specialties [4]. Furthermore, inter-specialty differences in the income of physicians may have far-reaching implications for components of healthcare spending. Gaining an understanding of the distribution of physician income between medical specialties could therefore, assist policymakers with their physician manpower predictions, reformation of payment meth-ods and the overall reallocation of healthcare resources. However, despite considerable research having been undertaken into this particular area under the managed care system (which is only one component of a plural-istic health care system and is responsible for less than half of all health care in the United States), the income differences between medical specialties under the Na-tional Health Insurance (NHI) system in Taiwan remain unclear[5–8]. In addition, most of the previous studies relating to the income of physicians, which have been heavily reliant upon survey research[9–11], may not accurately reflect the income of physicians because of unreliable responses or potential recall (selection) bias. Taiwan’s NHI program, which was initiated in March 1995 as a means of financing healthcare for all of its citizens, has a unique combination of character-istics including universal coverage, a single-payer pay-ment system with the governpay-ment as the sole insurer, comprehensive benefits and access to any medical in-stitution of the patient’s choice.

Under the NHI system, the majority of physicians, particularly office-based physicians, are paid on the basis of the services they provide, as opposed to traditional out-of-pocket payments from patients. Consequently, in addition to the registration fees paid by consumers, the total amount of reimbursements claimed and received from the Bureau of the NHI (BNHI) represents the major income source for office-based physician practices in Taiwan. Physician practice incomes have, however, now been influenced by the BNHI’s payment policy, which now controls the amount and rate of remuneration for physicians, as well as the allocation of medical resources.

Under the Taiwan NHI, all office-based physicians, regardless of their medical specialties, are reimbursed at the same rate for all diagnostic services provided to patients. However, concerns have been raised as to whether this payment system, as initially designed, can distribute office-based physician practice incomes

between different specialties on an equitable basis. The purpose of this study is therefore to examine the differences between office-based physicians’ practice incomes under the NHI, based upon their medical specialties.

The study uses the population database obtained from the Department of Health in Taiwan, which contains details of all of the medical claims submitted to the BNHI by all physician practices. In addition, since the data is based upon a single-payer system, this affords us with a unique opportunity to correlate physician specialties with their practice incomes. In addition to its contribution to the literature on this topic and its contribution to cross-country comparisons, this study provides important policy guidance for Taiwan, as well as for other countries which either have, or are contemplating the design and introduction of a similar healthcare system or reimbursement mechanism.

2. Methods

Our study began by obtaining 2002 data on all of the 9323 office-based physicians in Taiwan, which com-prised of physician’s socio-demographic information, practice setting and structure, as well as the monthly BNHI claim summaries for patient fees. We chose only office-based physicians as study subjects because, un-like hospital-based physicians who are paid by vari-ous methods adapted by individual hospitals, almost all of Taiwan’s office-based physicians are self-employed, completely independent of hospitals and paid on a BNHI ‘fee-for-service’ basis. All physicians who had worked for less than 12 months in the study year (n = 1203) or were aged over 70 years (n = 676), were also excluded from the study, which left us with a total of 7444 physicians who fulfilled our study criteria.

The dependent variable of interest to this study was the annual gross income of physician practices, which was defined as the monetary amount of total annual medical benefits claimed, along with the clinic reg-istration fees paid directly by patients. Since primary care clinics have been subject to the enforcement of the NHI global budget since 2001, the monetary amount of total medical benefits claimed by office-based physi-cians has been adjusted in this study by a monthly discount value according to the relative value of the dollars claimed. The majority of office-based

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physi-cians charged their patients clinic registration fees of between NT$ 50.00 and NT$ 150.00. We have selected the mean value, NT$ 100, as the standard basis for each patient in order to calculate the total clinic registration fees charged by each office-based physician.

The key independent variable of interest to this study is the medical specialty of each physician. Although many physicians have more than one specialty certifi-cate, they were categorized on the basis of the self-designated medical specialty which they had reported to the Department of Health (DOH). Specialties were divided into twelve categories in this study: general practice, family practice, internal medicine, surgery, pediatrics, ob/gyn, orthopedics, ENT, ophthalmology, dermatology, rehabilitation and ‘others’.

Based upon previous studies on physician income, the control variables were the physician’s age (as an indicator for practical experience), gender (sex), specialty-board status (certification), type of practice, number of physicians in a clinic, location of clinic, ur-banization level of the city/county in which the clinic was located and the percentage of the population of the city/county over the age of 65 or under the age of 5 years[12–14].

We classified the age of physicians into five groups:

≤35, 36–45, 46–55, 56–65 and ≥66 years, and

clas-sified their type of practices as solo practice, single medical specialty group or multi-specialty group. The location of the clinic was divided into Taipei, Kaoh-siung, and Northern, Central, Southern and Eastern Taiwan, based upon the location of the BNHI branch where clinics claimed their medical benefits. The de-gree of urbanization of the cities/counties was classi-fied into eight stratifications according to the standards published by the Institute of Occupational Safety and Health in Taiwan (1 = most urbanized, 8 = least urban-ized)[15]. These standards include population density, age structure, immigration rate, economic activities, average family income, educational level and health-care facilities.

The percentage of the population over the age of 65 or under the age of 5 years of the city/county in which clinics were located was also included in the study. The rationale for including this variable was that, as compared to other age groups, the demand for medical services between the old and the young may be higher. We used the data on ‘Population Registrations in the Taiwan Area in 2002’, released annually by the

Pop-ulation Affairs Administration at the Ministry of the Interior in Taiwan, to calculate the percentage of the population over the age of 65 years or under the age of 5 years in each of the cities/counties.

Statistical analysis was carried out with the Sta-tistical Package for the Social Sciences (SPSS 10.0 for Windows, 1997, SPSS, Chicago, IL). Descriptive statistical analyses including frequency, percentage, mean and standard deviation were performed on all of the identified variables. One-way ANOVA and

t-test were also carried out in order to examine the

various relationships between physician gross practice incomes and physician medical specialty, gender, age, certificate, type of practice, practice location, number of physicians in a clinic and urbanization level of the community in which the clinic was located. In addi-tion, multiple regression analyses were undertaken to model the natural logarithm of annual physician gross practice incomes as a linear function of a set of inde-pendent variables. The differences were considered significant if a two-sided P-value was less than or equal to 0.05.

3. Results

Table 1provides a summary of the number of office-based physicians by their medical specialty, location of clinic, the number of physicians in their clinics and the urbanization level of their practice cities/counties. The ages of the sample of 7444 office-based physicians ranged from 29 to 70 years, with a mean age of 47.8 and a standard deviation of 8.4 years. The distribu-tion of medical specialties suggested that the majority of office-based physicians were specializing in general practice. The ‘others’ category included plastic surgery, neurosurgery, psychiatry, radiology, pathology and nu-clear medicine.

The bivariate statistics of physicians’ mean annual gross practice income are also illustrated inTable 1, by physician age, gender and professional characteris-tics. The mean annual gross practice income was NT$ 8,793,056 with a standard deviation of NT$ 6,671,411 (the average exchange rate in 2002 was US$ 1 = NT$ 33.5). Physicians specializing in rehabilitation and or-thopedics were the highest paid in 2002, whilst ob/gyn physicians had the lowest gross practice income of any specialty.

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256 H.-C. Lin et al. / Health Policy 73 (2005) 253–262 Table 1

Description of physician characteristics, mean annual practice incomes, and results of one-way ANOVA and t-test (n = 7444)

Variable n (%) Mean annual income (NT$) F (t)-value

Specialty 45.07*** General practice 1959 (26.3) 7929878 Family practice 828 (11.1) 7933506 Internal medicine 940 (12.6) 10520252 Surgery 281 (3.8) 6711549 Pediatrics 794 (10.7) 8449100 Ob/gyn 638 (8.6) 5873426 Orthopedics 91 (1.2) 12319852 ENT 821 (11.0) 10310293 Ophthalmology 542 (7.3) 10886840 Dermatology 250 (3.4) 10499923 Rehabilitation 73 (1.0) 15181717 Others 227 (3) 8423756 Gender −3.54*** Male 6917 (92.9) 8965411 Female 527 (7.1) 7843386 Age (year) 214.64*** ≤35 282 (3.8) 9565496 36–45 3052 (41.0) 10911199 46–55 2735 (36.7) 8193148 56–65 1132 (15.2) 5510633 ≥66 243 (3.3) 3336483 Certificate −1.38 Yes 7297 (98.0) 8808343 No 147 (2.0) 8034233 Practice type 103.02*** Solo practice 5034 (67.6) 8056421 Single-specialty group 1645 (22.1) 10638560 Multi-specialty group 765 (10.3) 9671972 Clinic location 10.36*** Taipei 2285 (30.7) 8308836 Northern 866 (11.6) 8695429 Central 1667 (22.4) 8438174 Southern 1166 (15.7) 9865784 Kaoushung 1282 (17.2) 9166668 Eastern 178 (2.4) 9089725 Number of physicians 53.12*** 1 5034 (67.6) 8056421 2 1736 (23.3) 10014947 3 439 (5.9) 10832685 4 130 (1.7) 11955449 ≥5 105 (1.4) 1164616 Urbanization level 9.40*** 1 (highest) 970 (13.0) 7588656 2 2426 (32.6) 8471728 3 1520 (20.4) 9124885 4 670 (9.0) 9368105 5 1024 (13.8) 9670583 6 447 (6.0) 8845878 7 292 (3.9) 9013685 8 (lowest) 95 (1.3) 9545961

In 2002, the average exchange rate was US$ 1 = NT$ 33.5.

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H.-C. Lin et al. / Health P olicy 73 (2005) 253–262 257

Mean annual gross practice incomes of sampled physician according to physician specialty (n = 7444)

Variable Specialty General (NT$) Family (NT$) Internal (NT$) Surgery (NT$) Pediatrics (NT$) Ob/Gyn (NT$) Ortho (NT$) ENT (NT$) Ophthalm (NT$) Derma (NT$) Rehab (NT$) Gender Male 7998937 7960746 10429722 6711549 8710021 5835083 12429213 10390464 11306080 10965427 15783319 Female 6170756 7410628 12729670 N/A 6908536 6200192 7453274 7099426 8402813 8489344 12646393 Age (year) < 35 7202629 8646280 13546789 N/A 8703962 7805810 10540972 11960071 9694945 11046868 17875187 36–45 9714990 9191501 19069198 9647503 9439523 7948524 13169533 11424281 11684377 11138990 15404115 46–55 7426731 8288601 9259074 8014460 7635769 5694178 11552366 9174219 10430,240 10093451 14625867 56–65 5332900 5492701 5887389 5742292 5106390 3217646 10592372 6403190 7039,627 6505513 4071492 > 65 3391664 3399758 3106342 3654823 3161982 2667767 N/A 4159686 3846,517 3674764 N/A Practice type Solo 7605979 7805795 6601354 6388796 8311955 5168254 13198823 10218467 10561519 10196609 15648650 Single-specialty 8986594 7681866 20897998 7967139 9231062 7153000 12308634 10415483 11263765 11228389 N/A Multi-specialty 8318253 8689147 13837010 7697602 7482013 7552423 9645325 10523201 11724473 9250408 13518270 Clinic location Taipei branch 7582386 7394993 10570800 6146842 8112616 5280766 11103311 9650397 9278577 9500489 11712309 Northern branch 7586837 7512563 9563858 5421514 9260078 5845838 13587092 11348544 11637346 11412412 15897155 Central branch 7688603 7951470 8932297 7070983 8339259 5825076 10692986 10264441 10880395 9013686 13474680 Southern branch 8262107 8205239 14254225 6864692 8645407 6871511 14078633 10786478 13197750 14615159 23105068 Kaoushung 8670930 8457826 9359553 6958880 8419772 6236348 12598463 10697298 11222195 11379367 18195920 Eastern branch 7604469 9631715 11581565 7948178 8598322 6435222 12309270 12028147 12048649 11705617 10975569

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258 H.-C. Lin et al. / Health Policy 73 (2005) 253–262 Table 3

Multiple regression analysis for the relationships between adjusted mean annual gross practice income and other factors

Variable Log (mean annual practice income)

B S.E. t-Test

Specialty General practice

Family practice (no = 0) 0.018 0.012 1.528

Internal medicine (no = 0) 0.074 0.013 5.599***

Pediatrics (no = 0) 0.040 0.012 3.152** Surgery (no = 0) 0.031 0.026 1.552 Ob/Gyn (no = 0) −0.129 0.013 −9.923*** Orthopedics (no = 0) 0.178 0.032 5.603*** ENT (no = 0) 0.112 0.013 8.910*** Ophthalmology (no = 0) 0.111 0.014 8.076*** Dermatology (no = 0) 0.124 0.019 6.498*** Rehab (no = 0) 0.296 0.034 8.680*** Others (no = 0) 0.032 0.020 1.607 Gender Male (no = 0) 0.126 0.013 9.566*** Female Age (year) <35 (no = 0) −0.053 0.018 −3.027** 36–45 46–55 (no = 0) −0.124 0.008 −16.381*** 56–65 (no = 0) −0.325 0.010 −31.387*** >65 (no = 0) −0.598 0.019 −31.780*** Practice type Solo practice

Single-specialty group (no = 0) 0.075 0.008 9.117***

Multi-specialty group (no = 0) 0.073 0.011 6.563***

Clinic location Taipei branch

Northern branch (no = 0) −0.022 0.014 −1.537

Central branch (no = 0) −0.046 0.012 −3.926***

Southern branch (no = 0) 0.027 0.013 2.175*

Kaoushung branch (no = 0) 0.041 0.012 3.338***

Eastern branch (no = 0) 0.071 0.025 3.012**

Urbanization level 1 (no = 0) −0.049 0.016 −3.144** 2 3 (no = 0) 0.052 0.010 5.355*** 4 (no = 0) 0.067 0.013 5.177*** 5 (no = 0) 0.076 0.011 6.756*** 6 (no = 0) 0.071 0.015 4.781*** 7 (no = 0) 0.060 0.018 5.293*** 8 (no = 0) 0.095 0.030 4.288***

Percentage of residents over 65 or under 5 years old 0.871 0.278 3.123**

Constant 6.733 0.026 260.570*** n 7444 Adjusted R2 0.298 F 101.60*** *P < 0.05. **P < 0.01. ***P < 0.001.

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One-way ANOVA and t-test showed that there were significant relationships between mean annual gross practice income and physician specialty (P < 0.001), gender (P < 0.001), age (P < 0.001), type of practice (P < 0.001), location of clinic (P < 0.001), the number of physicians in a clinic (P < 0.001) and the urbaniza-tion level of the cities/counties in which the clinics were located (P < 0.001). For the regression analyses, the variable of the number of physicians in clinics was excluded so as to circumvent collinearity, since, as their name suggests, all solo-practice clinics have only one physician, while group practices do not.

Table 2 describes the gross practice incomes of physicians in different medical specialties by their gender, age, type of practice and location of clinic, showing that male physicians consistently had higher annual gross practice incomes across specialties, with the exceptions of internal medicine and ob/gyn. As expected, those physicians aged over 65 years had significantly lower practice incomes than those aged 65 years or below in the specialties of general practice, family practice, internal medicine, surgery, pediatrics, ob/gyn, orthopedics, ENT, ophthalmology and derma-tology (all P < 0.001). Moreover, in most specialties, solo practice physicians had lower gross practice incomes than their counterparts in group practices.

Table 3 displays the adjusted relationships, us-ing multiple regression analysis, between the annual gross practice incomes of physicians and their socio-demographic and professional characteristics. Within this analysis, 29.8% of the observed variation in physi-cian gross practice incomes was explained by the se-lected independent variables. The regression analysis shows that physician annual gross practice incomes were significantly related to physician specialty after adjusting for physician gender, age, type of practice, location of clinic, urbanization level, and percentage of residents in the city/county over 65 or under 5 years of age. Relative to general practice, physicians spe-cializing in internal medicine (P < 0.001), pediatrics (P < 0.01), orthopedics (P < 0.001), ENT (P < 0.001), ophthalmology (P < 0.001), dermatology (P < 0.001) and rehabilitation (P < 0.001) had significantly higher annual gross practice incomes, whilst physicians spe-cializing in ob/gyn (P < 0.001) had significantly lower annual gross practice incomes.

Physicians aged between 36 and 45 years had the highest annual gross practice incomes when compared

to their counterparts in other age groups, whilst the results also demonstrated that male physicians earned more than their female counterparts (P < 0.001). In ad-dition, it is worth noting that when taking into con-sideration the cities/counties in which the clinics were located, with a reduction in the degree of urbanization, there was a significant increase in the annual gross prac-tice incomes of physicians.

4. Discussion

This study has used a population-based database to explore inter-specialty differences in the gross prac-tice incomes of office-based physician under a BNHI single-payer system. Although physician incomes have seldom been the direct focus of policymakers, many healthcare policies have been influenced by patterns of physician income[16]. However, most of the previ-ous studies relating to physician income have tended to rely upon survey research as opposed to adminis-trative data analysis, with the result that recall errors amongst respondents have the potential of adding bias to the findings.

As the results in Table 3 show, despite attempts by the BNHI to equalize practice incomes between specialties, by setting the same rates of diagnostic remuneration across the board, this study finds that physician specialty was the most important contribu-tory factor for the wide variations in the gross practice incomes of physicians. This finding is consistent with previous studies conducted in other countries[2,9,17]

which concluded that there was a significant associa-tion between physician incomes and their area of spe-cialty.

However, the findings of this study, which took place in Taiwan, stand in stark contrast to the findings within the US[5], where it was found that primary care, in-cluding general practice, family practice, pediatrics and internal medicine, were the areas of medical specialty which provided physicians with the lowest incomes. Comparing with primary care physicians, ob/gyn spe-cialty in Taiwan provided the lowest annual gross prac-tice incomes.

The differences between the levels of demand for various medical services and the physician payment systems of the US and Taiwan provide some explana-tion for this; however, another possible reason for this

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260 H.-C. Lin et al. / Health Policy 73 (2005) 253–262 contradiction may well be the intense competition

be-tween hospital outpatient departments in Taiwan within this specialty. It seems that the majority of patients in Taiwan believe that a hospital’s superior institutional infrastructure, in terms of advanced medical equipment and the round-the-clock availability of physicians, en-ables them to better handle the uncertainties associated with healthcare delivery[18].

The widespread establishment of hospitals, brought about by the implementation of the NHI, has ensured that the availability and accessibility to hospital out-patient departments is no longer a problem. Patients are therefore more likely to choose hospital outpatient departments to receive medical treatment for certain medical conditions that were previously considered to present a higher risk to their lives. Nevertheless, given their convenience and short waiting times, office-based clinics remain the place of choice for patients wishing to receive treatment for mild ailments, such as upper respiratory infections[19]. This was a factor revealed by a study on pediatric patients by Liu and Wu, which found that children who were more than mildly ill were more likely to be taken straight to a hospital outpatients department rather than an office-based clinic[20].

A further potential contributory factor to low gross practice incomes in ob/gyn specialty is the decreas-ing birth rate in Taiwan. Since the majority of ex-pectant mothers have usually taken their delivery de-cision already, with regard to their preferred health-care provider, they will invariably be visiting the same providers for pre- and post-natal care. Over the past three decades, however, the crude birth rate in Tai-wan has dropped considerably, from 24.15 per 1000 in 1972, to 11.02 per 1000 in 2002, largely as a result of late and second marriages, women’s career commit-ments and increasing financial concerns creating dis-incentives for raising children[21–24]. This decline in the birth rate has resulted in reduced income from both deliveries and pre- and post-natal care, which have tra-ditionally been a major source of income for ob/gyn physicians.

After adjusting for physician’s socio-demographic and professional characteristics, the findings of this study also reveal that physicians specializing in reha-bilitation had the highest annual gross practice incomes (Table 3). The main reason for such high incomes in this particular medical specialty is the high

reimburse-ment for treatreimburse-ment fees. All medical claims by office-based physicians can be divided into three major parts: treatment, diagnosis and drug fees. The treatment fees claimed by rehabilitation physicians, at a mean annual amount of NT$ 11,989,248, were almost eight times as high as those claimed by other physicians, at a mean an-nual amount of NT$ 1,538,100. There were, however, fewer patient visits to rehabilitation clinics, with an annual mean of 12,168 visits, as compared to those of other specialty clinics, with an annual mean of 18,864 visits.

Physicians in other specialties generally under-take only evaluation and diagnosis; in addition, un-like healthcare delivery systems in some countries, which use ‘gatekeepers’ to control medical utilization levels by limiting patient referrals to specialty physi-cians, consumers in Taiwan can go directly to reha-bilitation clinics to receive treatment under the NHI. Furthermore, rehabilitation physicians invariably use many different treatment procedures on patients dur-ing each visit, such as infrared, hot/cold packs, paraf-fin baths, ultrasound, ultraviolet and shortwave or mi-crowave diathermy, whilst most of the patients visiting rehabilitation clinics also need frequent or long-term treatment. All of these factors lead to the performance of a greater volume of treatment procedures resulting in dramatic rises in the annual practice incomes of rehabil-itation physicians and other procedure-oriented medi-cal specialties.

We should, at this stage, point out three limitations of this study. First of all, although the 1-year cross-sectional data does provide a good picture of the re-lationship between medical specialties and physician practice incomes, our study does not precisely deter-mine the causal relationships, nor do we address the process by which physicians choose, or are chosen, for their medical specialties. It may well be that differ-ent physicians make a conscious choice to differ-enter dif-ferent areas of medical specialty, with each specialty having different characteristics of attraction, such as in-come, and other non-pecuniary factors, such as work-load, security, leisure and independence, and that the compensatory differentials created by these charac-teristics may thereby, affect the basic income-leisure trade-off.

We contend that the differences which we found in physician practice incomes could actually be a function of self-selection by physicians into the various areas of

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medical specialty, rather than a function of the different medical specialties themselves. However, such a causal relationship can only be definitively determined with an appropriate model design which uses longitudinal data.

Secondly, the previous studies in this area have in-sisted that the variations in physician income are due to the number of weeks worked per year, or the number of hours worked per week[8,24]; however, the dataset used in this study does not provide information on the number of days or weeks worked by physicians within a year. Thus, further research will be necessary in order to clarify the relationship between the income levels of physicians and the total amount of time worked in any given year.

Thirdly, since the data on costs for each clinic is unavailable, this study reports significant differences only in the gross incomes of physician practices, as opposed to the net income of their practices. It is clear, however, that practice costs could vary significantly between specialties and between practices.

Despite these limitations, our findings do have im-plications for office-based physicians and healthcare policymakers alike. First of all, the findings of our study have demonstrated that, even after adjusting for the socio-demographic and professional characteristics of physicians, there are significant relationships between the differentials in physician income and the various medical specialties, which indicates that despite the ef-forts of the NHI to equalize physician practice incomes by setting the same diagnostic remuneration rates for all office-based physicians, differences in gross prac-tice incomes between specialties are still evident. The difference in the mean gross practice incomes between specialties (ob/gyn versus rehabilitation) was even 106 per cent higher than the annual mean of all physician practice incomes. We suggest that the diagnostic remu-neration rates for office-based physicians should take into account the medical specialty of each physician in order to fairly compensate for all services provided by physicians in Taiwan.

Secondly, the results of our study have demonstrated that physicians in procedure-based specialties, such as rehabilitation and orthopedics, had higher gross prac-tice incomes than those in the more diagnosis-oriented specialties, such as general practice, family practice and internal medicine. We recommend that within cer-tain specialties, the current ‘fee-for-service’ payment

system should be replaced by the introduction of a re-defined fee schedule, based upon episodes of care. This change would help to redistribute payments from treat-ment procedures to evaluation services.

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