Following implementation by the Bu-reau of National Health Insurance (BNHI) of a fixed budget for reimbursing hospitals in 2002 and a hospital self-management plan this year, Taiwan's health care system has been in turmoil. In early October, matters finally came to a head when Taichung Veterans General Hospital was penalized by the BNHI, in a move that drew fire from medical care professionals. Subsequently, workers at district hospitals took to the streets to protest what they saw as the unfairness of the current scheme.
Large and small hospitals alike are complaining. Patients are finding it difficult to get appointments for outpatient clinics, impeding their ability to obtain medical care. The original designer of the system, current Department of Health (DOH) deputy minister Chang Hong-jen submitted his resignation to take responsibility for the situation. The National Health Insurance (NHI) system impacts the welfare of all Taiwan's people, so what should be done about a situation in which the government, health care institutions, and patients lose out?
It has been more than two years since the fixed-budget scheme for health care reimbursements was first instituted on July 1, 2002. Over the past two years, the BNHI has hoped the system would differentiate the functions of hospitals at each level, re-define their role in Taiwan's medical care and establish a referral system. Unfortunately, actual execution of these plans has been fraught with difficulties, and the target for criticism has been the fixed-budget policy that was intended to control costs and prevent the waste of health care resources.
What is the fixed-budget scheme? The amount of reimbursement to which individual hospitals are entitled is determined by the volume of services they provide, with this amount reflected in a point system. As an example, a hospital's outpatient clinic might have access to a total of NT$10,000 for reimbursement. If the hospital is allocated 100 points by the NHI program, then if 100 patients are seen each patient is worth one point. If a hospital attempts to increase revenues by treating 200 patients, each patient will be worth only 0.5 points, while the total reimbursement it receives stays fixed.
While the fixed-budget policy was created with good intentions, it has not worked smoothly in practice. Last year, the total amount budgeted by the BNHI for the country's medical care expenses was more than NT$240 billion. Actual expenditures exceeded the projected amount by NT$30 billion, severely reducing the value of the reimbursement points. When a hospital requested NT$100 from the BNHI, reimbursement was immediately discounted by 15%, so that the hospital received only NT$85. In the first quarter of this year, this was reduced further to NT$72.
The loss in value of each point was a severe blow to district hospitals, which are primarily focused on outpatient services. According to statistics from the Taiwan Community Hospital Association (TCHA), from 1995-when the NHI program was first instituted-to 2002, more than 200 district hospitals ceased operations. This year, more than 30 additional hospitals have not been able to continue operating in their established manner, instead transforming themselves into clinics, while most of the remaining district hospitals are barely surviving.
In order to preserve their livelihoods, health care workers have been forced to take to the streets in protest. On 12 October, in an unprecedented move, 1500 health care employees from district hospitals did exactly that, exciting much public discussion.
Hsieh Wen-hui, head of the TCHA, points out that outpatient clinics account for 70% of district hospitals' income. The BNHI, however, has decreed that in order to receive the full amount of reimbursement, district hospitals must conform to the same ratio of outpatients to inpatients as large hospitals (45:55). As a result, small hospitals, which had few inpatients, suffered losses if they treated too many patients in their outpatient clinics.
After the fixed-budget scheme was instituted, the BNHI followed up early this year by introducing a hospital self-management plan, which became the Hospital Excellence Plan in July, itself the subject of controversy in the medical care sector.
To date, 227 hospitals have enrolled in the Hospital Excellence Plan-nearly 42% of all hospitals in Taiwan. Unlike the fixed-budget scheme, in which all hospitals must share a fixed amount of available funds, each hospital in the plan signs a separate agreement with the BNHI. This agreement guarantees that the reimbursement that the hospital receives for a quarter will be equal to what it received in the same quarter the previous year. However, any claims exceeding this sum will not be honored by the BNHI. In other words, if a hospital's expenditures surpass the upper limit set by the BNHI, it will likewise face a situation where the more health care services it provides, the greater its financial losses.
With financial resources strictly constrained, hospitals have initiated measures to control costs, such as limiting the number of patients who can access outpatient services, increasing registration fees, changing medications, and reducing the number of admissions to their emergency rooms. As a result, the public is encountering difficulties in obtaining medical care, and patients with serious ailments are becoming "untouchables" in the eyes of hospitals.
The BNHI points out that from July to September of this year, complaints filed by the public increased exponentially, with almost 100 filed in September alone at Taichung Veterans General Hospital. These complaints included closing access to more than 200 hospital beds, restrictions on the number of patients who can access outpatient services, refusals to prescribe medication for patients with severe illnesses or requests that such patients foot their own bills, and so on. When discussions failed to yield improvements, on October 8 the BNHI moved to penalize Taichung Veterans General Hospital by suspending it from the Hospital Excellence Plan. In order to protect the public's right to medical services, the BNHI deployed members of a 100-person inspection team to some hospitals to assist patients in receiving care.
This tactic aroused the objections of large hospitals. The Association of Medical Centers released a statement asserting that practices such as referring patients with chronic illnesses to "strategically allied" district hospitals, or limiting the number of outpatients who can be seen by each doctor to 60 per session, have been adopted in an attempt to coordinate with national health care policy. They claim that the BNHI views the hospitals' approach as a refusal to treat patients and therefore enforced strict penalties, unreasonably placing medical centers in a no-win situation.
DOH deputy minister Chen Tsai-chin said that as the hours for outpatient service are limited, restricting the number of persons who can register might qualify as "reasonable," but patients requiring critical care cannot be refused, as this violates a physician's duty to save patients' lives.
Behind all the controversies lies the bigger issue of insufficient resources. After nine years, the NHI program faces problems that threaten its very survival. DOH minister Chen Chien-jen stated recently that the NHI reserve fund has been nearly depleted, and that "changes must be made."
Looking to the future, it seems to be a foregone conclusion that NHI premiums will have to increase to ensure that hospitals can survive, the public can get needed medical care, and the NHI program itself can stay solvent. The caveat is that besides increasing revenues, restraining expenditures and eliminating waste are the only viable long-term options for saving the program, and the only means of achieving a satisfactory result for the government, the health care sector, and the public.
How are National Health lnsurance funds allocated? source:BNHI / graphic by Lee Su-ling
