Comparison Actual Conversion Factor with Estimated Conversion Factor by Fee Adjustment Model Reflecting Health Service Volume

Abstract

Background: Price control alone may not successfully restrain growth in health expenditures. This study aimed to propose fee adjustment model suitable for Korea reflecting health service volume and to clarify applicability of the model by comparing actual conversion factor with estimated conversion factor from simulation of this model.

Methods: Fee adjustment model was developed based on Alberta’s fee adjustment formula in Canada and 7 alternatives were assessed according to diversely applied parameters of the model.

Results: Estimated conversion factors of the tertiary care hospital and the hospital were lower than actual conversion factors, since the utilization of heath service has been increased. However, there was no big difference between estimated conversion factors and actual conversion factors of the general hospital and the clinic. Eventually this fee adjustment model could estimate proper conversion factor reflecting health service volume.

Conclusion: This model may be applicable to the mechanism as determining conversion factor between insurer and provider via negotiation and controling growth in health expenditures.