OBJECTIVES:  In 2012, 0.3% of Taiwan end-stage renal disease (ESRD) patients accounted for 6.64% of National Health Insurance (NHI) dialysis spending.  We investigated the five-year financial impact of changing the distribution of patients undergoing peritoneal dialysis (PD) and in-center hemodialysis (ICHD) in Taiwan. METHODS:   An Excel^®-based budget impact model was constructed to assess dialysis-associated costs.  The model incorporates Taiwan current modality distribution and accounts for ESRD outpatient and inpatient total healthcare cost. Epidemiological data of ESRD patients from 2000 to 2011 was acquired from Taiwan Renal Data System by Taiwan Society of Nephrology. The transplant rate was provided by experts in the field. These data were used to estimate dialysis population for the next five years. Dialysis costs were obtained by National Health Research Institutes (NHRI) Databases for 2008. The baseline scenario assumed a stable distribution of PD (10%) and ICHD (90%) over five years.  Four scenarios, including the prevalence of PD increasing by 2%, 3%, and 5% or decreasing by 1.0% each year for five years, were analyzed. RESULTS: Under the current best available cost information, an increase in the prevalent PD population from 10% in 2014 to 18%, 22%, or 30% in 2018 is predicted to result in five-year cumulative savings for  NHI dialysis budget by NT$2,199 million (0.67%), NT$3,299 million (1.0%), and NT$5,498 million (1.67%), respectively. If the prevalent PD population were to decrease from 10% in 2013 to 6.0% by 2017, the total payment for dialysis patients would increase by NT$1,100 million (0.33%) over the next five years. CONCLUSIONS:  Under the best available cost information associated with PD and HD in Taiwan, incentives to increase the proportion of patients on PD could help reduce the total healthcare costs associated with dialysis patients.