Hsueh-Fen Chen ^1,2,3* Hui-Min Hsieh ^3,4,5 Wei-Shan Chang ⁵

• ¹ Department of Healthcare Administration and Medical Informatics, College of Health Sciences, Kaohsiung Medical University, Kaohsiung, Taiwan
• ² Department of Medical Research, Kaohsiung Medical University Hospital, Kaohsiung, Taiwan
• ³ Center for Big Data Research, Kaohsiung Medical University, Kaohsiung, Taiwan
• ⁴ Department of Public Health, College of Health Sciences, Kaohsiung Medical University, Kaohsiung, Taiwan
• ⁵ Division of Medical Statistics and Bioinformatics, Department of Medical Research, Kaohsiung Medical University Hospital, Kaohsiung, Taiwan

Background Taiwan implemented hospital global budgeting with a floating-point value, which created a prison's dilemma. As a result, hospitals increased service volume, which made a floating-point value less than one New Taiwan Dollar (NTD). Recent hospital bed expansion and the call for enhancing a floating-point value to one NTD raise concerns about enhancing financial burden without adding value to care if hospitals expand hospital beds for volume competition. The present study aimed to examine the relationship between the supply of hospital beds and hospitalizations following an emergency department (ED) visit (called ED hospitalizations), by using diabetes-related ambulatory care sensitive conditions (ACSC) that are preventable and discretionary as an example. Methods The study was a pooled cross-sectional design analyzing 2011-2015 population-based claims data in Taiwan. The dependent variable was a dummy variable representing an ED hospitalization, with a treat-and-leave ED visit as the reference group. The key independent variable is the number of hospital beds per 1,000 population. Multivariate logistic regression models with and without a clustering function was used for the analyses. Results About 59.26% of diabetes-related ACSC ED visits was resulted in ED hospitalizations. The relationship between the supply of hospital beds and ED hospitalizations were statistically significant (OR=1.12; 95%CI: 1.09-1.14; p<0.001) in the model without clustering but were statistically insignificant in the model with clustering (OR=1.03; 95%CI: 0.94-1.12; P>0.05). Several social risk factors were positively associated with the likelihood of ED hospitalizations, such as low income and percentage of population without a high school diploma. In contrast, other factors, such as females and the Charlson comorbidity index, were negatively associated with the likelihood of ED hospitalizations. Conclusions. Under hospital global budgeting with a floating-point value mechanism, increases in hospital beds likely motivate hospitals to admit ED patients with preventable and discretionary conditions. Our study emphasizes the urgent need to add value-based incentive mechanisms to the current global budget payment. These incentives may encourage providers to focus on quality of care rather than volume competition. By addressing social risk factors contributing to poor health outcomes, population health could be potentially improved while reducing preventable ED visits and admissions.