Inefficient, poorly structured, and unfair--just some of the criticisms leveled at Taiwan's national health insurance scheme, now two years old. Even so, near-universal health care has became a reality. Are the complaints fair?
During President Clinton's re-election campaign, he described universal health coverage as an issue "of the most urgent priority." But compared to what America has so far actually managed to achieve, Taiwan can claim to have done rather well. Prior to March 1995, only 12.7 million people (roughly 60 percent of the island's population) were eligible to benefit from a mishmash of thirteen public health insurance plans. That left more than 8.5 million uninsured, among them children and nearly half of those aged over sixty-five. Then, after six years of planning, the ROC government launched the National Health Insurance (NHI) program on March 1, 1995.
Under the National Health Law, all those who have been registered as residents for a period of four months or more are both eligible and obliged to be enrolled in the program. Only servicemen (who receive free medical care) and prisoners (who must pay their own medical bills) are outside its scope.
The program is funded from various sources. All patients, except those over seventy, the indigent, and persons suffering from serious chronic illnesses, are required to shoulder part of the cost of treatment, with employers and the government making up the balance. Employees currently pay 30 percent of the premiums in the form of payroll deductions. Employers chip in 60 percent, and the government the remaining 10 percent. As an example, a worker earning more than US$800 a month, with a spouse and two children, contributes about US$42 a month. Employee rates start at 4.25 percent of salary, and are subject to a 6 percent ceiling.
As regards benefits, between 70 and 95 percent of the medical costs of patients admitted to hospital are covered. Outpatients must contribute to the cost of care by making a flat-rate payment and paying a registration fee of about US$2 at clinics and local hospitals, and $4 at larger regional hospitals and medical centers.
According to the Bureau of National Health Insurance (BNHI), which oversees the program, about 95.6 percent of the island's population had been enrolled by the end of 1996, at a cost thus far of 5.6 percent of GDP. More than 15,000 clinics and hospitals--91 percent of Taiwan's medical organizations--have joined the program. For Taiwan's people, a universal health care system has become a highly prized reality.
Some enthusiasts have made very extravagant claims for this program. "It's not easy to protect the entire population from disease and suffering at a pretty low premium rate, but we've done it and we didn't have to spend a lot of money," says Yeh Ching-chuan (葉金川), BNHI's general manager. "What's more, our medical care system is superior to that of most other countries."
Yang Chih-liang (楊志良), director of the Institute of Health Care Organization Administration of the College of Public Health at National Taiwan University (NTU), sets the achievement in perspective. "I do think the program is an outstanding achievement," he says. "It's unique. Japan has had health insurance since 1961, but the results have been only so-so. South Korea started up a program in 1989, but large numbers of people there are either still uninsured or refusing to pay their premiums. We also outperform the United States, where 15 percent of the population remains uninsured, but 14 percent of the GDP goes on health care."
All the major killers come under the health program's umbrella, including cancer, congenital heart disease, hemophilia, serious mental diseases, uremia, and occupational diseases. Up to now, about 280,000 people have been issued with serious illness cards, at a cost of approximately US$91 million--15 percent of the program's total benefits payout.
"The NHI program has really helped relieve the heavy financial burden on seriously ill patients and their families, as well as the charitable organizations that mainly carried the burden before," says Lee Chung-hsiang (李鍾祥), executive director of the Childhood Cancer Foundation of the R.O.C., who is also a professor of pediatrics at NTU. "No matter how secure it may be financially, any family with a seriously ill member is going to find its resources whittled away by medical bills. The program has changed everything--not only for them, but also for organizations like ours, which can now afford to spend their money on research into the prevention of chronic illness."
These eulogies do not tell quite the whole story, however. For the first few weeks of its life, the NHI program was in a state of chaos. Hospitals had not been given enough time to prepare for the new system, and the government had been unable to achieve its goal of issuing everyone with an insurance card before the program began. But according to BNHI, surveys conducted by Taiwan's mainstream media indicate that the degree of satisfaction with the program among the population had risen from 30 percent at inception to 60 percent in late 1996. So the public seems to be gradually accepting the new system.
Or is it? "The public has adjusted to this program, but that doesn't mean it's okay," Yang Chih-liang says. "There are still a number of controversies, and countless complaints. Whether the National Health Insurance Law should be revised is an important issue for the authorities to think about if a crisis is to be avoided."
Some of the most significant disputes center around premiums. "People are going to end up paying more than they did under the old labor insurance or civil insurance schemes," says Wu Ming-yen (吳明彥), secretary-general of the Nongovernmental Hospitals & Clinics Association. But apart from that basic criticism, there are problems over differential ratios. Simply put, private-sector employees have to pay extra for additional benefits, whereas government employees do not, and there is in any case a basic-premium differential between private-sector workers and civil servants. BNHI has decided to resolve this situation by requiring civil servants to pay extra for additional benefits like everyone else.
Critics also think it is wrong to compel people to be insured by a single government agency (BNHI), even though they do tend to agree that participation in the program should be mandatory. "In the absence of any competition, a single insurer can do whatever it wants," says Lan Chung-fu (藍忠孚), professor of Health Economics and Policy at National Yang Ming University's Graduate Institute of Public Health. "It's like being a player and a referee at the same time. It's the sort of problem you get with dictatorships. The public should be allowed a real choice, according to individual needs."
Lee Chung-hsiang of the Childhood Cancer Foundation has a similar viewpoint. According to him, one way of creating a competitive market would be to open up health insurance to private organizations. For instance, employers could establish company schemes to take care of their own employees, leaving the government with residual responsibility for the unemployed and the very poor. "That would take a big financial burden off the government," he says.
Lee also criticizes the concept of standardized premiums. "The program doesn't take account of human nature," he says. Those who seldom or never use their health insurance cards feel the program is unfair, because they still have to pay the same amount as people who make frequent use of medical facilities. In similar vein, he is unhappy with the requirement that everybody receives exactly the same coverage, irrespective of whether they want it or not. "I'm a doctor and I can take care of myself," he says. "I'm hardly ever going to need outpatient insurance. It's like motor insurance--not every insured person needs or wants to take all the types of coverage available."
But Yeh Ching-chuan, BNHI's general manager, disagrees. He points out that the whole object of the program is to shield the population, and that means just about everyone, from the consequences of all and any serious illnesses and injuries. "Most of the time, people don't even give it a second thought," he says. "But we nearly all have to visit the hospital some time in our lives, and then we find out just how important the program really is. That's the spirit of social insurance. Another way of looking at it is to see NHI premiums as an investment, or even as a kind of donation that helps other people in need."
Maybe. But critics also home in on the fact that implementation of the program has actually done nothing to meet at least one need of prime importance: upgrading the quality of medical care. Every day, hospital clinics are jammed with patients who must wait hours to spend a few harassed minutes with an overworked physician. One of the program's much-touted attractions was that it would gradually wean people away from the habit of going to the hospital for any problem, large or small, thereby helping hospitals and clinics to discharge their proper functions. In that respect at least, the program has yet to make any significant impact. According to data supplied by National Taiwan University Hospital, one of Taiwan's leading medical centers, the number of outpatient cases increased from 60,004 in 1994 (before the establishment of the program) to 63,943 in 1995. The problem is not confined to Taipei. The outpatient departments of large hospitals islandwide are still often crammed with people like town squares on market day.
"It's difficult to use this system as a means of changing people's hospital-going habits," says Wu Ming-yen of the Nongovernmental Hospitals & Clinics Association. "People who live near large hospitals find it convenient to go there. If you force them to go to large hospitals for serious illnesses and to small clinics for minor ones, it diminishes their right of access to medical resources. In any case, most people aren't qualified to judge how serious their ailments are, so how can they be expected to decide which medical organization to visit?"
There are those who go even further. "I think the NHI program has actually made matters worse," says National Yang Ming University's Lan Chung-fu, "because each doctor and medical organization is paid at the same rate, regardless of the quality of the equipment and the individual doctor's professional skills."
This point is at the heart of an acrimonious dispute between the medical profession and the Department of Health. Payment to doctors and hospitals is in accordance with a fee-based system that allows prices for drugs and services to be negotiated by BNHI and health care providers. In an attempt to keep costs down, relatively simple, standard medical procedures are paid for on a per-case basis. For practical purposes, this means that doctors are paid according to the number of patients they see each day. Outpatient fees are higher than inpatient equivalents. Hospitals and clinics, anxious to boost income and make up for what they perceive as inadequate reward for inpatient services, therefore encourage their medical staff to work to the limit and beyond. Between January and September 1996, doctors were seeing more than fifty patients a day in one-third of Taiwan's hospitals and clinics.
"The payment system has caused a lot of problems," says Yang Chih-liang of NTU's College of Public Health. "For large hospitals, it's easier to get payment for outpatient services, because those claims are seldom turned down by BNHI, whereas they're much stricter when it comes to inpatient services. Therefore, to survive, hospitals tend to increase the number of outpatients they treat. A patient has two or three minutes with a doctor, on average, and is unlikely to get particularly wonderful treatment in such a short time."
Yang is backed by Lee Chung-hsiang. "The payment system isn't fair, because a senior doctor able to offer patients higher quality treatment is paid at the same rate as a young medic," he adds. "There's no incentive to advance to a higher academic level or improve professional skills. Result--he quality of care will deteriorate, and patients will be the losers." Lee queries why the cost of paying senior doctors more cannot be borne by patients themselves, if they want a superior service. "The higher the quality of the medical care they hope to get, the more they should have to pay," he says.
The medical profession is greatly about this problem. Lu Shih-chun (呂適存) is the proprietor of a children's clinic. "It's difficult enough for large hospitals to attract young doctors to tough departments like surgery and gynecology, which always exact more from their staff in terms of time and stamina," he points out. "Worse, we're now finding senior surgeons who try to avoid doing operations, because the responsibility is heavy but the money's bad." In his experience, a growing number of surgeons are deserting the larger hospitals in favor of running their own clinics. A few have even given up medicine altogether since implementation of the NHI program.
On the other hand, certain doctors, Lu among them, express the view that the program has done everyone a favor by making clinics more attractive to doctors. "The pay's the same in large hospitals and clinics," Lu says. "But doctors preferred working in large hospitals, so in the past it's been difficult to confine medical organizations at different levels to their proper roles, with hospitals concentrating on inpatient services, teaching, and research, and clinics offering outpatient services."
BNHI's Yeh Ching-chuan does not accept that the program initiated the brain drain from larger hospitals. "There's a natural cycle in medicine," he says. "You'll often find 'hot' departments losing popularity, while 'cold' ones are on the way up. Every few years, the situation rights itself. This happens in other occupations, and the public shouldn't worry about it." But he does admit that the current payment system needs to be revised, because it is obviously unfair for every department to be paid at the same rate, irrespective of the degree of specialty involved. "We'll do it," he says, "but it's not something that can happen overnight. Rushing it will only cause problems. We need to revise the system step by step." But he foresees that it will be far from easy to set up a truly equitable standard that satisfies each special interest group within the profession.
Change is urgently needed, though. Doctors complain that what they can earn under the program is scarcely enough to make both ends meet. "It's had a great impact on private clinics," says Shih Hsien-yen (石賢彥), secretary-general of the Taiwan Medical Practitioners Association. "Doctors don't make as much money as people think. Because the ruling party wants to win people's support, they avoid raising premiums, which means they have to keep payouts low also. Disbursements in Taiwan are about the lowest in the world."
"Doctors are paid about US$4.35-6.50 per patient, to include both professional services and the cost of drugs," says National Yang Ming University's Lan Chung-fu, "which is less than the cost of a bowl of beef noodles, or a shampoo in a beauty parlor. It's totally unreasonable." Lan thinks that BNHI should set up a fair-payment system based on scientific cost accounting. That is not to say that the state should pay doctors and hospitals whatever they ask. "Patients' interests should be considered as well," he says.
Another problem doctors claim to encounter is a perceived hostile attitude on the part of BNHI when scrutinizing claims for payment. They complain that the bureau focuses too much on potential fraud, such as asking patients to pay for things that are covered by the program, not issuing receipts, and exaggerating the number of patients treated. "I feel that we doctors are being oppressed by the bureau," Lu Shih-chun says. "It seems they see us as thieves." Lee Chung-hsiang of the Childhood Cancer Foundation knows how Lu feels. "The bureau shouldn't treat doctors as potential violators," he says. "It's actually very hard to get around the regulations. What we need is incentives for doctors to follow the rules."
But?--What do we need incentives for?" Yeh Ching-chuan demands to know. "Everyone has to obey the law. We've given doctors incentives in that we pay them, and anyway, incentives can't altogether take the place of punishment." According to him, the numbers of illegal cases have been dropping, but he has no intention of easing up on those who abuse the system.
Lan Chung-fu acknowledges that the NHI program is not really as bad as many critics maintain. He thinks it has several merits, apart from the obvious one of offering seriously ill patients a financial safety net. "It's very convenient to be able to go and see a doctor with just a health insurance card and not have to pay a guarantee fee to the hospital in advance," he says. "In the past, that requirement sometimes led hospitals to turn away urgent cases."
The debate over the program has also energized those who contend that an ounce of prevention is worth a pound of cure. Yang Chin-liang of NTU's College of Public Health, for example, would like to see Taiwan adopt a system of Health Maintenance Organizations (HMOs), popular in the United States. Indeed, he wants them to replace the NHI program outright. "Under the present program, the more patients doctors have the happier they are," he says. "It's ridiculous!" Yang contrasts that with HMOs, where the healthier people are, the more doctors get paid. But BNHI has no plans to launch HMOs in the near future. "A shaky policy which changes today and changes again the next day is destined to fail," says Lan Chung-fu. "We have to evaluate the success of the current system before making changes."
Lee Chung-hsiang also emphasizes the importance of prevention, but he believes that the goal can be attained through the NHI program. "Full medical care should include prevention, diagnosis, treatment, rehab, and education," he says. "But at the moment the focus is on treatment, and not all kinds of treatment are covered--diagnosis and rehab, for instance." Under the existing regime, for example, people who undergo treatment to determine if they have cancer cannot recover the cost if they have a tumor that turns out to be benign, and anyone suffering from bone cancer who undergoes amputation must pay for the artificial limb. "How to upgrade the quality of medical care under this program is the first priority for medical professionals and the bureau," Lee says.
According to BNHI, there will be important revisions to the program in the next few years. The way the program is financed is under review, with particular reference to the problem of different population groups paying different premiums. The bureau will also look at the provision of health care in general, and the feasibility of more preventive services. People living in mountainous and remote areas have always had relatively poor access to health care, a problem that has become more pronounced since the program got under way. In the future, such residents will be required to pay lower premiums, and steps will be taken to improve the quality of medical care in their areas.
The bureau also intends to look at the payment system for medical staff. It hopes to establish a fair and effective mechanism for negotiating fee schedules, one that will give due weight to the relative importance of different medical specialties. Finally, the review will examine ways to contain costs, particularly outpatient costs, which are threatening to undermine the program's financial stability.
Yeh Ching-chuan believes that Taiwan's program is among the best in the world. But he is not blind to the fact that revisions and corrections are necessary if it is to survive and thrive. "As things stand, the program should work well throughout the next decade," he says. "With over 60 percent of the population supporting it, the program deserves to go on--at least there can be no doubt about that."