Wednesday, April 22, 2009

Taiwan World Class Medical Insurance-- Translated

The article written by Dong Qing Feng published in the most recent issue of Asiaweek has pointed out that Taiwan's Medical insurance system is regarded as one of the best model for the world. From Medical demand, Medical supply etc. it has been praised and ranked second only to Sweden. Few of the main reasons for such high ranking include the hardworking doctors, low wages for medical staffs, few medical disputes and compensations and most importantly, most of the medical institutions are run and controlled by the government.

The report points out that last year, Nobel Prize winner, Economic Professor of US Princeton University and column writer for New York Times, Professor Paul Krugman, has praised Taiwan's Medical Insurance system in New York Times and urged the Americans to emulate such system.

Krugman believes that the Taiwan Medical Insurance system can provide a good example for all Americans to be insured within their economic means. He reiterates that within a short period of six years, the growth in the number of Taiwanese being medically insured has raised from less than 60% to 97%. Besides, the cost for all Taiwanese to be insured is very low and it takes population and income growth into account. Even if the cost of medical care increase, the increase will be insignificant.

The Taiwan medical insurance system was implemented in 1st March 1995. It was one of the greatest achievement of the KMT when Lian Zhan was the Prime Minister then. It becomes famous in the world for providing low medical insurance premium, wide medical coverage and convenience resulting in high subscription rate by Taiwanese. Taiwan Medical Insurance scheme consolidated workers, laborers and farmers medical insurance payment and created a single entity medical insurance for all. It implements a single payment channel and a gross payment system.

This National Medical Insurance scheme embrace the spirit of social insurance, which is risk sharing and under the fundamental guiding principle of mutual help, the young will earn money to take care of the medical risks of the aged. In doing so, it achieves mutual aid across different generations and races. It also creates a huge health database that could be used by healthcare research. On the other hand, the administration cost has been kept under 2% and that is why it has been praised internationally.

In 2000, EIU has ranked Taiwan's Medical Insurance scheme as number two under medical demand and supply, second only to Sweden in the whole world. The ABC has praised Taiwan's Medical Insurance scheme in one of its program broadcast in 2003, pointing out the fact that with a monthly medical insurance premium of US$20 and an average cost of US$4 to US$10 for every medical visit, you could make appointment to any hospital with any preferred doctors of your choice in Taiwan. There are at least 50 countries around the world that have paid visits to Taiwan to study its Medical Insurance scheme in recent years.

Taiwan Medical Insurance Scheme has been well known to be value for money. Base on their income, Taiwanese will pay a token amount of insurance premium every month and they will be able to enjoy all kinds of medical services. Regardless of rich or poor, big hospitals or small clinics, all will receive the same level of medical services. All will receive equal treatment. Even if the rich wish to pay more for additional privileged services, it will be prohibited. Besides, it is very convenient to get medical services there, with big number of hospitals and clinics availability all throughout Taiwan. You can pick and choose your choice of hospital or clinic without any need of doctor's recommendation.

The Medical Insurance is not solely born by the people. Private companies and the government will have to share the cost of the premium as well. Those companies that bought workers' insurance for their employees will have to pay for their medical insurance as well. This is due to the fact that such insurance premium will include workers' insurance and medical insurance. The present law dictates that employers will have to bear 60% of their workers' medical insurance, employees and their family members will bear 30% while the government will bear 10%.

Taiwan Medical Insurance Scheme's premiums are based on income classification. The premiums are charged according to 10 different classes of income. For example, those who earn less than NT$17280 (about US$500) will pay only NT$600 as monthly premium. Those with monthly income more than NT$131700, they will pay a monthly premium of NT$5400.

Foreign workers are included in the Medical Insurance Scheme.

Due to the fact that the National Medical Insurance Scheme is compulsory for all, everyone will have to be admitted into the Medical Insurance Scheme. This will include foreign students, migrants and even foreign workers. Its core value is “Big illness for Hospitals, small illness for small clinics” . Everyone who seek medical care, apart from paying the basic administration fee, patients will have to bear part of the medical cost.

Ex-DPP Legislative Yuan member Sheng Fu Xiong has a heart operation, warded for 4 days. The operation implanted a blood vessel widener for him. He paid about NT$20000 (about US$600), the medical insurance has helped him paid a few hundred dollars. Such operation will cost more than a million of New Taiwan dollars without medical insurance.

Taiwan Medical Insurance is very Cheap!

As a medical doctor, Sheng Fu Xiong is one of the few in Legislative Yuan who are regarded as those who have put in lots of effort in researching on the Medical Insurance Scheme back then. He pointed out that the insurance premium that each Taiwanese has to pay is about one sixth to one eight of US medical insurance premiums and this is very cheap!

Taiwan's Medical Insurance Scheme is the creation of Harvard professor Xiao Qing Lun and this creation is based on the study of Canada's united insurance system. However, Canada's medical insurance scheme is basically a failure, why does Taiwan's scheme a success then? Sheng Fu Xiong pointed out that firstly, Taiwan doctors are just too hardworking. Many doctors has to see 120 patients a day (while in US, the average is only 30), this is very rare and unique in the world. Secondly, Taiwan's medical staff, apart from doctors, like nurses, physiotherapists, nutrionists, psychiatrists, pharmacists etc., are fewer in comparison and their wages are lower. Take nurses for example, their pay is only 20% of US nurses. Thirdly, there are few medical disputes in Taiwan, there are less medical related lawsuits. Even if there are, even if the doctor lost the case, the compensation amount is not high. Compensation for death caused by erroneous diagnosis is at most NT$1m to NT$2m, some are even below NT$1m. Forth, all American medical institutions are listed company, the pressure of profitability is higher. Taiwan's medical institutions are prohibited from listing in the stock exchange, most of them are run and subsidized by the government.

In comparison, Canada's medical insurance system does not have all these advantages. Sheng Fu Xiong pointed out that most important of all, Canada does not have efficiency. If a patient needs an operation that is deemed as non-urgent, like an operation on hip joint, they will need to wait for at least 6 months. In Taiwan, the same operation will only take 1 week to be completed.

Sheng Fu Xiong revealed that a few years ago, Hong Kong government was considering of implementing a system similar to Taiwan's Medical Insurance scheme. Xiao Qinglun has travelled to Hong Kong to explain the scheme to the Hong Kong officials. He was engaged by the Hong Kong government to do a feasibility study there but in the end, he recommended against implementing such a scheme in Hong Kong. The Hong Kong government has accepted his recommendation. “I feel that it is right not to implement it” This is because this system could only be successful in Taiwan, it will fail in other parts of the world. “This is the fruit of Taiwan's special circumstances”.

Hong Kong's system is the middle path between Taiwan and US.

Sheng Fu Xiong said that one of the main reason that it is not suitable for Hong Kong to emulate Taiwan's Medical Insurance scheme is that Hong Kong doctors are not as hardworking as Taiwan's, there are more medical staffs than Taiwan, salaries are higher than Taiwan and there are more medical disputes than Taiwan.” He said that Hong Kong's system is a middle path between Taiwan and US. It has all the bad points that US has but the problems are not as serious as US. Hong Kong does not have the good points that Taiwan has, like hardworking doctors, low compensation for medical dispute, medical institutions are not listed on stock exchange...etc.

Sheng Fu Xiong criticize Krugman as an amateur. Although Krugman is a Liberal but he has socialist influence in his heart. Thus, he does not discount government intervention totally. However, Taiwan's Medical Insurance scheme is a single provider and it under heavy influenced by the governmental system. Besides, it is not a multi-insurance scheme but a unison insurance scheme and this is the role played by the government. He only sees the beauty of Taiwan's Medical Insurance Scheme but not the potential problems. It is due to the fact that the Taiwan Medical Insurance scheme is based on a collapsible structure that it needs to be reformed.

Taiwan government has paid nearly NT$400Billion per year but medical experts criticize that the medical wastage every year amount to Nt$10billion resulting in the Medical Insurance scheme recording deficits every year. Sheng Fu Xiong pointed out that the potential worries of the Medical Insurance scheme is “the growth of our premium collections could not catch up with the growth of the medical expenses.” Thus every time when the accounts are balanced, 3 years later it will become a deficit again. In another words, expenses are always bigger than premium collections and this is due to the lack of restrains and the spirit of free market principles. Taiwanese like to visit hospital, even for a small flu, they would visit the big hospital. Some mother would bring their children to GP in the morning. If there is no significant improvement, they will bring them to otolaryngology in the afternoon. This is almost impossible in US.

One of the main reason for such high medical expenses for the Medical Insurance Scheme is that Taiwanese are used to taking medicine. For the whole of last year, the expenses on medicine by the Medical Insurance scheme has reached NT$125Billion, an increase of 6.9% from the previous year. Among these expenses, medicine for hypertension, glucagon and statin has amounted to NT$32.3Billion. The top medicine “MaiYou” alone, which is used mainly for treatment of hypertension and strengthening the heart functionality, has consistently top the list of medicine for 8 years, cost almost NT$4.5Billion per year.

Due to popular demand, I have decided to spend some time in translating the Chinese article on Taiwan's World Class Medical Insurance here.

Goh Meng Seng

Taiwan Medical Insurance scheme has the mission to provide healthcare for everyone in Taiwan. Although the government has claimed 70% approval rate from the people, but it could not just brush off the potential threats of deficits. The problems of limited medical resources, deficits of the Medical Insurance scheme etc has cast doubts on how long this Medical Insurance Scheme could last.

There are merits in Taiwan Medical Insurance Scheme but we should not just look at the glamorous flowers that it glooms and try to copy it wholesale. We must do thorough examination of its specialty, learn from its good points and try to manage the bad. Only then could we avoid deficits and improve on providing healthcare to all Taiwanese.

Translated by Goh Meng Seng

1 comment:

A said...

The Taiwan experience really serves as a good model even for welfare states like Canada... However, where do insurance companies like blue shield california come into the picture or are they left out of the picture?