Abstract It is noted that the major driving forces of development of subacute care market include the prospective payment system such as DRGs TW-DRGs payment policy started in January of 2010, and will be completely implemented during the coming 5 years. And it is expected that some of the untoward reactions of the medical care providers will change its structure and behavior in response to the financial fluctuation and operation risks¡Athis conditions give birth to the subacute care market. The purpose of the study includes (1)Estimation of the potential subacute care market raising by the impletement of the TW-DRGs payment policy. (2)How can the present medical service providers pave the way to joint the subacute care market. (3)Is there a chance to establish a new service model according to the operation circumstance in Taiwan!? Our study of subacute care and these issures involved an extensive literatures and documents review as well as interviews with knowledgeable experts from around the sourthern part of the country (including professor of medical college and management college, CEO of hospitals and nursing facilities and officer of public health department ) quantiatative analysis of the collected data was done. We came to a conclusion that there will be enomerous demand of subacute care market and there is no so-called subacute care provider noted in the Taiwan medical service system. The imbalance between demand and supplyment will lead to a chance of developing a new service model acccoding to the specific requirement of the people. Since patients and providers will response to the payment system designed and executed by the policy-maker of the government, our suggestion of policy implication about setting up the subacute care system include : 1. Defining subacute care clearly. 2. Recognizing proper requirements of providers. 3. Identifying rational clinical approach. 4. Improving patient placement and transfer process. 5. Ensuring that the care is reimbursed adequately and appropriately. Key Words: TW-DRGs¡ASubacute Care¡AStrategy

Abstract To investigate the reaction of hospitals in burn patient to the announcement of the coming diagnosis related groups (DRGs) payment system in 2014. The claimed data of 506 inpatients from 2009 to 2010 was used for the longitudinal analyses. The average length of stay (ALOS) and medical expenses of each burn patient were compared with the baseline data of 2009. The year effect was analyzed by the generalized estimating equation model. Comparing to the data in 2009, the average length of stay (ALOS) was increased, but medical expenses were decreased. The limitation of the scheme such as insufficient classification of case severity and hospital creep are also discussed. Medical expenses are different in different property of hospitals. Similar resource intensity is unfortunately seriously misunderstood as unified single federal rate in Taiwan. It is concluded that the coming DRGs payment system may changed hospital behavior. This change of hospital behavior may influence the quality of health care.