Health vs. healthcare
Besides the problems with the worsening of the larger medical environment, the NHI’s payment system has led to doctors being overworked for relatively little pay. The reasons involve the NHI system’s need to balance its insurance function with its welfare function, and the different perspectives of the public-health and the medical-care communities.
Yaung Chih-liang, a former minister of health who is now a chaired professor in the Department of Healthcare Administration at Asia University, was one of the original architects of the NHI system. He says that NHI has three objectives: promoting good health, eliminating medical bankruptcies, and preserving the dignity of life.
At the time the NHI system was being developed, Shen Fu-hsiung vigorously promoted a “catastrophic insurance” structure. Yaung views this approach as a non-starter.
“How do you distinguish major illnesses from minor?” asks Yaung. “If you insure major illnesses but not minor, you’ll end up with everyone looking for ways to make their minor illnesses into major ones so they’ll receive coverage.”
Yaung says that if NHI were intended only to provide protection against financial risk, then it could take the catastrophic insurance approach. But if it is intended to promote good health, it must also promote preventive care measures such as a balanced diet. He argues that if the system is indeed intended to promote good health, it shouldn’t 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 disagrees, arguing that the notions that “not treating small illnesses is detrimental to the poor,” or that “small illnesses left untreated become major illnesses,” are public-health myths.
In his view, 70% of people who are sick don’t need to see the doctor, or can treat themselves with over-the-counter remedies. Another 25% really do need to see the doctor and the quality of care they receive will affect their prognosis. The last 5% are beyond medical help. “Bluntly stated, most hospitals are making money off that first 70%. The medical community should be spending its energies healing that 25% who need its help, but the public-health community is instead concerned about the 70% who could get by without a doctor.”
Equity or excellence?
Shen says further that it was public-health scholars who guided the design of the NHI system 17 years ago, and that they sought to create a system that was fair, just, universal, and inexpensive. He argues that those goals have been achieved, but at the expense of excellence in medical care.
Nowadays, all of Taiwan’s hospitals emphasize outpatient treatment rather than inpatient treatment because the former is a moneymaker. This has worsened quality of care and caused treatment standards to regress. “Only hard-to-treat life-and-death illnesses require a hospital stay,” says Shen. “Using outpatient care to increase volume serves only to work doctors to death.”
Yaung views the issue from the standpoint of public welfare, and argues that fairness and universality are more important than excellence. He notes that South Africa performed the world’s first successful heart transplant, but has a mortality rate for pregnant women and women in labor that is 100 to 200 times that in Taiwan, not to mention an infant mortality rate that is 40 times higher than ours. Yaung says it is a proper role of the government to prioritize the healthcare of the general public over excellence in particular medical procedures.
Waste: a necessary evil?
In a whitepaper on health insurance, Chen Ding-shinn, an academician with the Academia Sinica, wrote: “Health insurance is a third-party payment system. As a result, neither healthcare providers nor patients are likely to make the most careful use of limited medical resources, giving rise to so-called ‘moral hazard.’”
Based on outpatient data, Taiwanese seek medical care an average of 14 times per person per year, slightly less often than the Japanese but more than twice as often as the average of six times per year in the US and Europe. Clearly, the public has room for improvement in its care-seeking practices.
Yaung says that waste is an inevitable consequence of achieving one of the goals of a national health insurance system. A 2010 report from the World Health Organization stated that 40% of global medical expenditures were spent on fraudulent medical procedures, “defensive medicine,” and waste. But where healthcare waste in the US costs US$600–800 billion per year, it amounts to less than US$16 billion in Taiwan.
Some have recommended having patients pay a larger portion of the cost of care as a means to reduce waste. “No one has been able to come up with a copayment system that would stop inappropriate uses of medical resources without also interfering with appropriate uses,” says Yaung, noting that the economic utility of NT$50 varies from person to person. Since the whole point of NHI is to provide healthcare to the entire populace, the copayments have to be very low.
Hospitals the root of the problem?
The differing concepts underlying the system are an issue, but so is the allocation of resources by hospitals. Where health insurers in the US make payments directly to caregivers, Taiwan’s NHI system pays hospitals. As a consequence, there is constant concern about hospitals lining their pockets at the expense of the caregivers they employ.
“No matter how much NHI pays hospitals, they don’t raise doctors’ salaries. What are we to do?” Yaung believes hospitals are using their profits to purchase equipment and expand their influence. Besides buying exorbitantly expensive medical devices, large hospitals have been buying up smaller hospitals, growing their networks and increasing their NHI payments.
Shen admits that higher salaries would attract more doctors, but argues that hospitals are opting instead to cut back on services because they can’t afford additional personnel.
He acknowledges that hospitals made money during the first eight years of the NHI system because the system enabled previously uninsured people to seek care. The increased patient numbers encouraged everyone to invest in new facilities. But he argues that the last eight years have been much tougher and that poorly run facilities have been going under. “Everyone thinks that the hospitals are pocketing fat profits,” says Shen, “but the business is actually very challenging.”