• Health Policy and Management
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• v.12 no.1
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• pp.21-53
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• 2002

The purpose of this study is to measure the resource use of the elderly in long-term care services and to examine the effects of patient and facility characteristics on their use of resources. The data were collected from 510 old people over sixty years of age, residing in five long-term care hospitals and two skilled nursing homes during the period between December 1, 2000 and February 28, 2001. For a full sample, when the first level of RUG(Resource Use Group)-III categories were employed as the proxy of patient severity, facility characteristics, such as location, size and ownership, have large effects on the resource use measured by service intensity, whereas patient characteristics such as severity have little or no effect. The resource use is significantly high if the facility: (1) is located in rural areas (gun): (2) has mare than 200 beds; (3) is a long-term care hospital; (4) is private; and (5) has a low percentage of medical aid patients. The analysis of the resource use in each RUG-III categories, for which ADL(Ability of Daily Living) were employed as the prosy of patient severity, shows a similar result. The loose relationship between the needs of residents and the resource use seems to be closely associated with the ineffective reimbursement system for providers. The current reimbursement system has no provision for quality improvement and reimburses facilities simply according to their types: fee-for-service for long-term care hospitals, and monthly-flat-rate or full-coverage-national-aid for skilled nursing facilities. It will be necessary to develop a more reasonable reimbursement system that takes patient's severity into account and gives incentives for long-term care providers to offer cost-effective services.