Taiwan’s well-oiled health care system serves as a model for US

On March 21st, over 250 people packed a conference room and spilled into the hallway of Santa Clara’s Hilton Hotel in order to learn about medical tourism in Taiwan. With one of the best healthcare systems in the world, Taiwan is actively touting its medical services overseas as a way of offsetting the island’s sluggish economy.

A group representing 14 private examination centers and medical products decided to target the four million overseas Chinese and test the US market. Among the facilities represented were the well-known Taipei Veterans General Hospital, Cheng Hsin Rehabilitation Medical Center, Kaohsiung Medical University Hospital, and the Buddhist Dalin Tzu Chi General Hospital.

Organized by Taiwan’s Ministry of Economic Affairs (MOEA) and the Taiwan Trade Center in San Francisco, the event was designed to promote the island’s quality healthcare system emphasizing the island’s state-of-the-art facilities and equipment, well-trained professionals and affordable prices. In addition to exceptional care, medical visitors can also enjoy Taiwan’s sights, and visit friends and family at the same time.

National Health Insurance

At the event, Dr. John Y. Jean, the CEO of Taipei Medical University Healthcare Group, spoke about Taiwan’s universal healthcare system, known as National Health Insurance (NHI). He said Taiwan’s healthcare system is recognized as the second best in the world after Switzerland.

NHI offers equal access, freedom to choose any doctor and no waiting time. John Reichard, CQ HealthBeat News Editor, wrote a detailed report entitled “Taiwan: Surprising Lessons from a Small Island” in last June’s CQ Politics (http://www.cqpolitics.com/wmspage.cfm?parm1=5&docID=hbnews-000002889735) praising Taiwan’s NHI system.

Taiwan’s NHI is a single-payer system, meaning only the government has the authority to handle payments. The single-payer approach is the key to keeping the costs generally affordable. The funds left over by healthy people with low medical costs can be used to pay for care of the sick.

Adopted in 1995, NHI offers universal coverage to over 22.6 million people. Before NHI, about 60 percent of the population had health insurance coverage and health costs were growing at double-digit rates. Now 99 percent of the population is covered and health costs are rising at around 5 percent annually.

In order to standardize quality care, Taiwan began its hospital accreditation program in 1978. After studying several American hospital accreditation systems, Taiwan’s Joint Commission on Hospital Accreditation (TJCHA) was formed in 1999. Dr. Jean, with 20 years of medical experience in Taiwan and America, said the system is a headache for each member hospital, but it is instrumental towards maintaining the high quality of hospital services on the island.

Another reason for Taiwan’s healthcare success can be attributed to the widespread provision of high-tech equipment in hospitals: 321 computer tomography (CT) scanners, 115 magnetic resonance imaging (MRI) scanners, 33 positron emission tomography (PET) scanners, and even some spiral MRI, which is very scarce globally.

Quality, affordable healthcare with minor hiccups

The advantage enjoyed by Taiwan’s people is affordable healthcare. As an example, the cost of a liver transplant in Taiwan is one-fifth to one-sixth of the same procedure in the US or UK. The cost of performing a coronary artery bypass graft (CABG) is about one-fifth of the cost in the US. The average cost of a of hip replacement in Taiwan is 17 percent of that charged in the US and 20 percent of that in the UK, 39 percent of that in Singapore and 50 percent of that in Thailand.

Taiwan is also a great destination for cosmetic surgery. The price of various plastic surgery procedures, including rhinoplasty, liposuction, and breast implants, is about one-third less than in the US. Dental implants, excimer laser surgery, and in-vitro fertilization (IVF) are 50 to 80 percent less costly than in the US.

Overall, average surgery costs in Taiwan are one-fifth of those in the US, and one-sixth those in Britain. In addition to more affordable surgical procedures, regular examinations and diagnostic tests also cost less. Costs of performing an endoscopy, colonoscopy sigmoidoscopy, or CT scan are about one-seventeenth of the price paid in the US.

In Santa Clara last month, Dr. Po-tung Chen, director of Show Chwan Health Care System, said it is common for seniors to have knee joint replacements. However, it is extremely costly and many are not covered by basic health insurance. The cost of this kind of increasingly common surgery in Taiwan is about one-third of that in the US.

Despite its success, Taiwan’s NHI struggles too. The biggest challenge is to balance its growing expenditure, growing at 5.5 percent, with revenues that are growing at an average rate of 4.7 percent. To offset this difference, the NHI system borrowed about NT$40 billion (US$3.2 billion) from banks, while lawmakers are considering the adoption of a new bill aimed at expanding the tax base funding the system.

In Taiwan, healthcare costs account for 6.16 percent of the island’s gross domestic product (GDP), while the US spends about 16 percent of its GDP on healthcare, yet still leaving 45 million people with no health insurance.

US hesitation

The US tends to regard the single-payer system as bureaucratic and inefficient. But Taiwan’s NHI has proven otherwise. The island’s administrative costs average under two percent of all healthcare spending while in the US administrative costs consumes 15-30 percent of all healthcare spending. Since everyone in Taiwan carries an insurance card with Smart technology imbedded, their medical information is readily available to doctors and healthcare administrators, saving both time and paperwork.

The US Congress is also generally resistant to the notion of a single-payer system because many congressional analysts consider it to be under-funded and fear it would curtail the profits needed to fund America’s medical innovation. Besides, US drug companies and insurance firms are major sources of political campaign donations.

Earlier this month, US Nobel Laureate Paul Krugman talked to the World Journal about his upcoming trip to Taiwan in May. Krugman said the US should have adopted a single-payer healthcare system like Taiwan’s after World War II. He added that the US government will face strong resistance from deeply rooted interest groups, but praised Taiwan’s healthcare system as one that “can show the Americans that it works.”

Michigan House Democrat John Conyers, Jr. is sponsoring legislation (HR 676) that would bring to the US a single-payer system. Advocates argue the system is hardly foreign in the US. After all, Medicare is a single payer system popular among seniors; although with vast spiraling costs as well.

Even ardent single-payer supporters agree that a US adoption of such a system would have to be a gradual process. The universal coverage plan developed by former Senator Hillary R. Clinton, involves competition between government and private entities.

Although Taiwan’s NHI may not be perfect, it is continuously striving to improve the quality of health and life in Taiwan. Its success is reflected by an increase in the island’s life expectancy in just two years. In 2005, life expectancy for men was 73.7, and for women 79. In 2007 this had increased to 75 and 81.9 respectively. Furthermore, the system has consistently won high satisfaction ratings of around 70 percent. More importantly, it has enabled the Taiwan government to reassure its people that they will be well cared for regardless of their individual circumstances.