When Kiyomi Liu (劉嘉玲) moved to Taiwan in 2013, she was taken aback – in a good way – by its cheap medical fees.

“I paid NT$150 (US$5) for an obstetrician-gynecologist consultation, an ultrasound and medicine at a neighborhood clinic,” said the Hsinchu-based American. “Back home, my bill came up to US$1,000 (NT$30,700) for the same procedure. I had to pay everything out of my own pocket because my insurance deductible was US$1,500 (NT$46,300).”

Liu is among the 99.6 percent of Taiwan’s 23.57 million people covered under the government-run National Health Insurance (NHI), a universal health care scheme that ensures every resident has access to quality and affordable medical care. The comprehensive coverage includes both inpatient and outpatient care, prescription drugs, traditional Chinese medicine, dental services and home nursing care. NHI enrollment is mandatory for all citizens and foreign residents in Taiwan.


Credit: Reuters / Nicky Loh

A man receives a vaccination from a nurse inside the Taipei City Hospital.

With over 92 percent of clinics and hospitals contracted to NHI, patients have a wide choice of doctors or hospitals to choose from. Wait times are short. You pay a modest out-of-pocket fee (copayment) ranging from NT$80 to NT$360 (US$2.50 to US$11.50) per consultation. If you are willing to fork out a bit more, you can go directly to specialty care without a referral. Each NHI user holds a ‘smart card’ that contains the user’s medical data. A swipe of the card gives your doctor instant access to real-time medical records.

Premiums are paid by the insured, employers and the government and calculated based on wages and supplementary incomes like bonuses and stock dividends. The government covers the premiums for low-income households, military personnel and prisoners. NHI collects premiums from the insured and reimburse payments to medical care providers. It also earns revenues from lottery and tobacco excise taxes.

Happy with NHI

The public is generally pleased with NHI, if the 85.8 percent satisfaction rate, according to the 2017-18 NHI Annual Report, is anything to go by. Easy access to medical care and reasonable fees rank as the top criteria in NHI’s annual Satisfaction Survey.

Liu and her Taiwanese husband, both salaried employees, pay about NT$5,000 (US$162) a month on premiums. In the U.S., the average family of four insured by the most common employer-sponsored health plan will spend NT$861,000 (US$28,000) a year or NT$70,000 (US$2,267) a month on health care in 2018, according to the annual Milliman Medical Index report.

Growing up in California, Liu and her five siblings and self-employed parents never had health insurance. “We couldn’t afford it,” says Liu. “We just banked on the fact that we never got sick.”

But in terms of quality of care, Taiwanese doctors can be brusque, and the facilities are utilitarian. Her Hsinchu ob-gyn sees a few patients simultaneously in a consultation room partitioned by curtains. However, Liu noted that doctors here seem to be up to speed on newer medical technology.

“If I have a chronic illness, I would still trust the medical care in Taiwan due to the sheer cost of treatment in the U.S.,” says Liu. “Ultimately, I would love to retire in the U.S., but I will keep my NHI account active in Taiwan.”

Sydney-based Taiwanese Eunice Wu (吴易玲) pays for additional private insurance, on top of Medicare (the NHI equivalent) in Australia, to access the same quality of health care she gets in Taiwan.

“When I only had Medicare, I waited for more than five hours to get an ophthalmologist to check my eyes,” says Wu, who has lived in Australia for 20 years. She and her husband spend an additional AUD$2,300 (NT$50,000) a year on private insurance. It still costs Wu about AUD$3,000 (NT$66,000) to get a tooth filling and a crown in Australia. It costs about half that in Taiwan.

“If I have serious dental problems, I’ll probably fly back to Taiwan for treatment,” she says.

Success stories

As a single payer, the government has market clout and the leverage to negotiate fees for medical service and supply while keeping administrative costs low. In 2017, Taiwan spent a mere 6.2 percent of the country’s gross domestic product (GDP) on health care, compared to 16 percent in the United States and an average of 9 percent in other Organization for Economic Cooperation and Development (OECD) countries.

When it comes to getting more bang for your buck, Taiwan ranks in the Top 10 for the world’s most efficient health care. Taiwan came in ninth, behind Australia and a notch ahead of the United Arab Emirates in Bloomberg’s Health Care Efficiency Scores, which compare medical costs and value in 56 economies with average lifespans of at least 70 years, GDP per capita exceeding US$5,000 (NT$154,390), and a minimum population of five million.

At 55, the U.S. health system ranked among the least efficient in the world.

Taiwanese society is justifiably proud of its free and universal health care. (Map: July 2018, via Wikicommons)

Taiwan’s health care system regularly gets showcased internationally, from The New York Times and The Telegraph to CNN and National Geographic Channel.

From 2016 to 2017 alone, NHI Administration hosted 700 foreign visitors – health experts, scholars and government officials from 54 countries who came to learn about NHI.

“They ask how we can spend so little and yet provide excellent health care,” says NHIA Director General Dr. Lee Po-chang (李伯璋) in an interview with The News Lens. “We are proud of our NHI system.”

Is NHI sustainable?

However, the system is far from perfect.

A budget deficit, an aging population, a rise in chronic diseases, questionable quality of care, disgruntled doctors and incessant public demand on Taiwan’s medical services are just some of the challenges detailed by Princeton University Health Policy Research Analyst Cheng Tsung-mei’s (鄭宗美) report on the country’s health care system.

Taiwan’s health spending is significantly lower than that of rich OECD countries. The system is either highly efficient or sorely underfunded. Or somewhere in between, said Cheng in an e-mail interview with The News Lens. An expert on comparative health systems globally, Cheng advises governments and agencies, including Taiwan’s, on health policies and reforms.

“I’ve consistently called for higher health spending in Taiwan, from 1 to 1.5 percentage points more, phased over time, and based on priorities decided jointly by the government and stakeholders,” said Cheng. “The public will be the main beneficiaries, for example, longer visits with doctors, shorter wait times for beds in large hospitals and medical centers, and etc.”

But like it or not, the public, a.k.a. the voters, have held the line on premium increases.

Since NHI was established in 1995, the government has only raised premiums twice. Public satisfaction in NHI dipped to 60 percent and below each time premiums were raised.

NHI’s annual expenditure currently grows by 4.83 percent while funding grows by 4.35 percent annually. “Fortunately, we have NT$200 billion (US$6.48 billion) in safety reserves,” says NHIA Director General Lee. “But the 2016 decrease in premium has resulted in a NT$10 billion (US$323.9 million) deficit and possibly the deficit could double this year to NT$24 billion (US$777 million).”

To keep a healthy balance sheet, NHI’s strategies include controlling expenditures, minimizing waste and increasing copayments.

Wasted resources

Needless or duplicated medical exams and drug prescriptions are some of the main contributors to a huge waste of resources, says Director General Lee.

“Twenty percent of patients who underwent MRI or CT scan never returned for the results. Some will do the same procedure in another hospital,” says Lee. “This wastage cost us NT$1.7billion (US$55 million). The patient doesn’t care, the doctor doesn’t care. And we [NHI] just pay, pay, pay.”

In Taiwan, each patient averages 15 annual visits to the doctor compared to the average of 5 visits in OECD countries. The total number of visits to hospitals and clinics in the first quarter of 2018 shows an increase of 4.298 million compared to the first quarter of 2017, partially due to an outbreak of influenza.

“That explains why our doctors are so busy and the demand for medical services keeps rising,” says Lee. Due to the lack of a gatekeeper system, patients with mild symptoms or illnesses can consult specialists at large hospitals, causing long lines.

“If you had to pay out of your own pocket, you would think twice about whether you really need to see a doctor or ask for drugs that you don’t need,” says Lee, a renal transplant surgeon. “An increase in copayments would be a good way to control the budget.”

In 2017, NHIA introduced the patient referral system to encourage the public to seek care at primary-level hospitals and clinics. If needed, the primary care doctor will then refer them to an appropriate specialist for further care.

“This will hopefully reduce outpatient volume at large hospitals and allow them to focus on treating major illnesses and on medical research,” adds Lee. Patients without a referral have to pay higher out-of-pocket fees. However, the sum difference, from NT$30 to NT$250 (US$1 to US$8), is fairly negligible.

NHIA encourages clinics and hospitals to form a two-way referral system to make it easier and more effective for patients to transfer between medical providers. For example, National Taiwan University (NTU) Hospital works closely with Taipei City hospitals to transfer stable patients or less serious cases to reduce their bed congestion.


Credit: Depositphotos

National Taiwan University (NTU) Hospital in Taipei.

But instead of blaming the public on wasting resources, the system itself is designed to be open to abuse, Lin Chao-yin (林昭吟), an associate professor at National Taipei University Department of Social Work and an adviser to the Taiwan Health Care Reform Foundation (THRF, 台灣醫療改革基金會), points out.

“Sometimes a patient is required by the doctor or hospital to return for follow-up visits or repeat medical exams. What should the patient do?” says Lin. An NGO that protects patients’ welfare, THRF also acts as a watchdog for the country’s health care system.

“We have to look at the issues from different perspectives,” says Lin, “and work together to figure out how to educate the public and make the system more effective.”

Health IT as a fix

To counter wasteful medical resources, NHIA promotes a cloud-based data sharing system. Rolled out in 2017, the MediCloud System is used to trace doctor visits, medical procedures, drug prescriptions or allergies, catastrophic diseases and organ donation consent. It simplifies the management of medical data, detects heavy users and medical fraud, and traces and monitors epidemic outbreaks and the spread of communicable diseases.

“If you’ve done a CT scan or MRI at NTU hospital, then you go to Chang Gung Hospital within a short time, you don’t need to repeat the same procedure,” says Director General Lee. “Since we launched the cloud system, the number of medical examinations like CT scans have dropped and saved NHIA NT$1.2 billion (US$38.86 million)” from July to Dec. 2017 compared with the same period in 2016. Doctors and medical providers are penalized if they are found to repeat procedures intentionally.

The PharmaCloud System stores patients’ real-time medication records for the last three months and has an alert function to prevent duplicate prescriptions. NHIA saved NT$340 million (US$11 million) after duplicate drug prescription rates dropped by half between 2014 and 2017.

To empower the public to take charge of their own health, NHIA launched the cloud-based service My Health Bank in 2014. Users sign up and log into the system via computer or smartphone app to check their up-to-date medical records for the last three years: from doctor’s visits and health test results to dental records and drug prescriptions. You can get tips on preventive care and reminders about your next health check.

To date, My Health Bank has 920,000 subscribers. NHIA plans to expand the service early next year to allow users to register their families, including the elderly and children, under one account.

Generous government subsidies

The cost of treating catastrophic illnesses takes up one third of the yearly medical expenditure: NT$181 billion (US$5.86 billion) in 2016. According to the 2017-18 NHI Annual Report, one third of NHI’s total drug expenditure goes towards the drugs used to treat these illnesses. Rich or poor, patients who suffer from illnesses like cancer or end-stage kidney failure are exempted from copayments and coinsurance.


Taiwan Presidential Office / Flickr

Mobile medical service employees in Taiwan.

But Cheng questioned the viability of such a generous copayment exemption policy. "The eligibility for copayment exemption should be reviewed by testing the means of patients to see if they can afford to pay any cost for the necessary treatments,” says Cheng, who has analyzed Taiwan’s health care system for decades.

For those who can afford to pay, copayments and coinsurance may have little or no impact on their household finances. But for the poor who cannot afford to pay, some will forego care.

“Means-testing would save the government real money, and also stop the income transfer from the poor to the rich which is the case under the current policy,” she adds.

NHIA plans to tweak the catastrophic illness exemption policy next year, said Director General Lee.

Aging population

As of March 2018, Taiwan has officially crossed the “aged society” threshold – which World Health Organization (WHO) guidelines define as a society in which over 14 percent of the population is aged 65 or older.

Taiwa is currently on track to become a “super-aged society” in 2026, or a society in which one out of five people is 65 or older.

The current Long-Term Care (LTC) program is in its infancy and only serves about 10 percent of Taiwanese who need LTC services, according to an April 2018 report in Taiwan’s Business Week, said Cheng.

“Taiwan should study countries with good LTC systems and experiences like Germany, Japan, Sweden and the Netherlands. And take the lessons home. Just as Taiwan’s NHI was designed – with many parts ‘imported’ from other countries,” Cheng adds.

She and her husband, the late Princeton professor Dr Uwe Reinhardt, were part of the committee, led by Harvard economist William Hsiao, to put together the NHI framework in the early 1990s.

In August, the government launched the 10-year Long-Term Care 2.0 plan to meet the rising demands of LTC. The 2.0 plan includes providing community-based service centers in local neighborhoods, expanding the coverage to include indigenous communities aged 55 and older, and offering government subsidies based on services provided rather than number of care hours.

Overworked, underpaid

So how does Taiwan continue to lift its health care standards despite the tight purse strings?

“At the huge expense of health professionals,” argues Chiang Kuan-yu (姜冠宇) of the Taiwan Medical Alliance for Labor Justice and Patient Safety (TMAL; 醫勞盟). Founded in 2012 by a group of physicians and nurses across Taiwan, TMAL has been plugging for all physicians to be covered under the Labor Standards Act (LSA, 勞動基準法) since its early years.

“We are tired and burnt out,” says Chiang.

In 2016, resident doctors clocked an average of 80 to 100 hours a week. Neurosurgery residents’ duty hours topped the chart at an average of 90.9 hours, followed by doctors in orthopedics, surgery, obstetrics, neurology and internal medicine.

Doctors are falling ill or suffering from exhaustion due to occupational hazards, Chiang added. One high profile case in 2009 involved a former resident doctor who suffered a stroke and subsequent brain damage after working 84 hours a week for six months. After a lengthy three-year legal battle, his family was able to claim a retirement pension and compensation. However, the doctor’s mental capacity has regressed to that of a six-year-old.

“Many cases are swept under the carpet or settled within the hospital because we are not protected by labor law,” says Chiang, a general physician at Far Eastern Memorial Hospital in New Taipei City.

Meantime, physicians who hanker for higher income tend to order diagnostic tests, do invasive medical procedures, or schedule follow-up appointments, Chiang explained.

Under NHI’s global budget system, fee-for-service is one of the payment methods in which a doctor is paid a fee based on each service rendered. Doctors also earn ‘bonuses’ from the percentage of income they generate for the hospital and out-of-pocket payments for services not covered under NHI.

Medical providers, however, are reimbursed based on a fixed budget to ensure NHI caps health spending.

“Many physicians have asked us to raise premiums in order to have more resources. In that way, they can be better compensated,” Director General Lee explains. “But the budget goes to the hospital managers who will reallocate their resources.”

In Taiwan, the average monthly salary of a physician ranges from NT$150,000 to NT$300,000 (US$4,850 to US$9,715), depending on their specialty and seniority.

Low pay is not unique to the medical profession in Taiwan, Chiang added. Taiwan’s work culture generally does not place value on jobs in fields such as health care or IT. Doctors here are increasingly seeking greener pastures in Singapore and China, with some even trying their luck by sitting for the United States Medical Licensing Examinations, said Chiang.

“We don’t have statistics for the number of doctors who have left the country, but the situation is bad enough that MOHW [Ministry of Health and Welfare], at one point, considered banning young doctors from practicing overseas,” says Chiang.


Credit: Depositphotos

Young doctors in Taiwan often leave for better pay and career opportunities in China, Singapore or the US.

“I am pessimistic about doctors getting better paid,” he admits. “What we can do, however, is to fight to improve our work environment and quality.”

A proposed amendment to the Labor Standards Act in 2019 would only cover resident doctors under the LSA. However, Director General Lee clarified that there are plans to include all senior doctors or specialists under the Act, which is still under discussion at the MOHW.

“Setting up the MediCloud system is one of our strategies to improve care quality and doctor’s working conditions,” Lee explains. MediCloud allows hospitals nationwide to upload patients' CT and MRI images and reports so primary care centers – local clinics or regional hospitals – can access these information easily.

“By strengthening the capacity of primary care, we hope the public could first seek care at primary-level clinics and hospitals, and have ‘family doctors,’” adds Lee. “This can help reduce the outpatient volume and alleviate the workload of doctors in larger hospitals.”

Shortage of doctors?

In 2016, there were 51,234 doctors (encompassing both western and traditional Chinese medicine), or 2.2 doctors per 1000 people. That’s lower than the OECD average of 3.4 to 9.0, according to a report on Taiwan health care by London-based consulting firm PwC.

“There is no shortage of registered doctors per se,” says Chiang. “There is a shortage of physicians in certain specialties due to stressful working conditions or where the rewards don’t commensurate the workload, for example in emergency care, surgery and geriatrics.”

In recent years, for example, psychiatry has become a popular field of study due to the perceived lighter workload and stress. There are no longer any openings for psychiatrists in hospitals and most psychiatrists end up in private clinics, he added.

“In terms of medical techniques and the latest medical equipment, Taiwan is lagging behind China,” says Chiang. “Everyone wants a good price but there’s no mechanism to stimulate medical innovation and research and development.”

How the public can help

As the head of NHIA, Director General Lee has his work cut out for him.

“We will not wait until NHI reaches the brink of bankruptcy,” says Lee, who turned around the fortunes of Tainan Hospital during his stint as superintendent from 2012 to 2016.

“I worked in a medical center, so I understand what is happening on the ground,” he says. “We identify the problems and we take the appropriate measures. Step by step.”

But the public has a vital role to play too, as Cheng pointed out. Social insurance programs can easily fall victim to the tragedy of the commons: where commonly owned properties (NHI in this case) are depleted from overuse by individuals who maximize their own well-being without regard for the common good.

“To maintain the beautiful pasture that is the NHI, everyone must do his or her share, to not overuse or abuse the system for selfish gains,” Cheng explains.

Before NHI existed 23 years ago, only 50 percent of the population was insured through different social insurance funds like farmers, fishermen, and civil servant insurance schemes. Those who had no insurance and couldn’t afford to pay would forsake care.

“The older generation has forgotten what we went through, whilst the younger generation has NHI from the day they were born,” says Lee. “Taiwanese expect the government to take of them. But everyone should know, to enjoy good medical care available for everyone, somebody has to pay for it.”

In recent years, the government has stepped up its public campaigns to educate the public on not wasting resources.

“But the best teacher for a patient is a doctor,” says Lee. “We encourage doctors not only to treat a patient’s disease but to also educate the patient to take care of his or her health.”

nx4nwr0ywro5j1hu4rsbtb6j3oiuasCredit: Taipei American School

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Editor: Nick Aspinwall (@Nick1Aspinwall)

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