Objectives: To investigate the effect of hospital global budgeting on the distribution of payments. Methods: We conducted a trend analysis to study the effect of hospital global budgeting on health expenditures and services. We also used a panel data model with hospital-specific fixed effects to investigate payment distributions among hospitals of different levels, ownership, and locations. The statistical analysis was based on monthly hospital claims from January 1996 to June 2005 provided by the Bureau of National Health Insurance. Results: Global budgeting had no significant effect on the number of outpatient and inpatient visits. Mean expenditures per inpatient day rose over time, as did the length of stay decreased over time, though this downward trend reversed after global budgeting. After the global budgeting period, we observe a significant positive effect on mean expenditures per outpatient visit. Regarding payment distribution, medical centers, not-for-profit hospitals, and hospitals in northern and central areas all gained resources. By contrast, district, public, and private hospitals, as well as hospitals in eastern and southern areas, received fewer resources. Conclusions: After global budgeting was implemented, payments were distributed toward urban, large, and not-for-profit hospitals. The Department of Health should pay attention to this problem.