Government reforms are driving a new era of health care for all citizens.
There have been many changes to the National Health Insurance (NHI) system since its introduction in March 1995. The premium structure has been modified twice, there have been numerous revisions to the payments system, and in 2011 the legislature passed an amended “second-generation NHI” slated for implementation in January 2013.
Taiwan has succeeded in creating a national health insurance system that has high enrollment (currently more than 99 percent), a high degree of fairness, high approval ratings and low costs. When prison inmates are included under the second-generation NHI, enrollment will rise to 99.51 percent of the population. In other words, it will become a truly universal system covering virtually every citizen other than those residing abroad long term.
In 2003, Taiwan’s health care system ranked second in the world in the World Health Organization’s (WHO) fairness in financial contribution index. The ratio of health care benefits received to insurance premiums paid was 5.2-to-1 for low-income families. What this means is that lowincome families received a great deal of medical care in return for very low premiums.
Every year, roughly 50 countries send representatives to Taiwan to study our inexpensive, but generous, system. Taiwanese health care has also been praised in the international media. In 2000, the London-based Economist magazine rated Taiwan’s system the second best in the world (behind only Sweden’s) for its achievements in public health, controlling health care expenditures and quality of care. In 2005, Paul Krugman, a Nobel laureate in economics from the United States, stated that his country should learn from Taiwan’s NHI experience.
The NHI is also the government’s most popular policy. According to the Bureau of National Health Insurance, over the last five years the public’s satisfaction with the system has held steady in the 77.5 to 85.2 percent range. More amazing is that Taiwan’s medical expenditures are lower than those of most OECD countries. Overall medical spending amounts to roughly NT$500 billion (US$16.7 billion), or just 6.6 percent of GDP.
Department of Health Minister Chiu Wen-ta says that the medical ecosystem has changed in the 17 years since the NHI was implemented. Among the problems in urgent need of a solution are that hospitals are larger and more corporate; that rural areas and outlying islands are encountering greater difficulties in recruiting personnel; that hospitals are emphasizing outpatient care; and that the distribution of doctors across specializations is becoming uneven as many flock to low-risk, low-stress and high-pay fields. This last has created a shortage of doctors in internal medicine, surgery, obstetrics, pediatrics and emergency medicine.
Besides the problems of the larger medical environment, the NHI’s payment system has led to doctors being overworked for relatively little pay. The reasons involve the system’s need to balance its insurance function with its welfare function, and the different perspectives of the publichealth and the medical-care communities.
Yaung Chih-liang, a former minister of health, was one of the original architects of the NHI system. He says that the NHI has three objectives: promoting good health, eliminating medical bankruptcies and preserving the dignity of life.
The health administrator argues that if the NHI were intended only to provide protection against financial risk, then it could take the catastrophic insurance approach. But if the system is indeed intended to promote good health, it should not insure against major illnesses because the latter approach delivers the least “bang for the buck.” Targeted cancer therapies, for example, are very expensive but have only limited effect.
But Shen Fu-hsiung, a former practicing physician and long-time observer of the NHI system, disagrees. In his view, 70 percent of people who are sick do not need to see a doctor, or could treat themselves with over-the-counter remedies. Another 25 percent really do need to see a doctor and the quality of care they receive will affect their prognosis. The last 5 percent are beyond medical help. “Bluntly stated, most hospitals are making money off that first 70 percent. The medical community should be spending its energies healing that 25 percent who need its help, but the publichealth community is instead concerned about the 70 percent who could get by without a doctor,” says Shen, who is also a former legislator. The differing concepts are an issue, but so is the allocation of resources by hospitals. Where health insurers in the United States make payments directly to caregivers, Taiwan’s NHI system pays hospitals. As a result, there is constant concern about hospitals lining their pockets at the expense of the caregivers they employ.
While he was minister of health, Yaung began instituting some quiet “reforms” on the supply side of things, changing the model from one in which “seeing more patients, prescribing more medications, and doing more surgeries earned hospitals more money without necessarily making the public any healthier,” to one in which hospital profits increased with patient health. In other words, he sought to move away from a system that “buys health care” and toward one that “buys better health.”
There is no question that the public-health and medical communities have their own perspectives. Despite the problems facing the NHI program, with adequate and timely reforms, it will continue to serve Taiwan by providing comprehensive and affordable health care.
