How did dentists respond to the introduction of global budgets in Taiwan? An evaluation using individual panel data.

In response to the introduction of global budgets, dentists might alter their supply behaviour, changing the number of visits, the amount of expenditure, and the type of services provided. We develop two-way fixed effects models to estimate these effects using a panel data constructed from outpatient dental care expenditures claims from the Taiwanese National Health Insurance system. The availability of a long panel allows us to estimate a "policy effect" for each dentist in the panel. The overall effect of global budgets is to constrain costs but there is evidence of a change in the mix of services. Male and younger dentists have higher policy effects than female and older dentists. Global budgets favour dentists in deprived areas and there is some evidence of increases in the expenditure per visit and the volume of composite resin fillings.