Topic: National Health Insurance in Taiwan

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Topic National Health Insurance in Taiwan

• Group members
• Jodie KWONG (04427778G)
• Lawrence CHAN (04703452G)
• Phiona SO (04726717G)
• Remus Au (04726219G)
• Vicky LAM (04727185G)

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Agenda of Presentation

• Outline of existing Tai Wan health care system
• Problem and Challenges
• Aging Problem
• Utilization imbalance of medical service
• Revenue and expenditure

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Geographical Feature of Tai Wan
Lands
270-km central mountain range, with over 200
peaks and elevation over 3,000 meters.
Mountains
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Country Profile (Year 2003)

• Population 22.60 million
• Age lt 15 20.4
• Age gt 65 9.2
• GNP per capita US 13,529
• GDP 6.26

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Health Indices (Year 2003)

• Birth Rate 10.1
• Death Rate 5.8
• Natural Increase Rate 4.3
• Infant Mortality Rate 4.9
• Maternal Mortality Rate 7.68
• Life Expectancy Male - 73.35 years
• Female - 78.82 years

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Country Profile - Political Background

• Before 2000, Kuomingtung (KMT) was the ruling
  party.
• In mid 1980, an universal health insurance scheme
  was suggested.
• Political forces drove KMT to accelerate NHI
  implementation.

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Chronology of Health Insurance
Year Description of Insurance Population Coverage
1950 Labor Insurance 40.12
1958 Government Employee Insurance 8.06
1985 Farmer Insurance 8.21
1990 Low-income Household Insurance 0.55
1995 National Health Insurance 100
2003 National Health Insurance 98.67
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Key Objectives of National Health Insurance

• Provide equal access to healthcare for all people
• Control health service cost at socially
  affordable level
• Promote efficient use of health care resources

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Characteristics of NHI

• Compulsory enrollment (citizens with household
  registry, foreigners with resident permits and
  dependents of aforesaid)
• Government-run insurance
• Single payer system (ie Bureau of NHI)
• Fee-for-service

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Characteristics of NHI (contd)

• Comprehensive benefits
• Payroll-related premiums shared by employers,
  employees and government
• Low premium policy
• Heavy government subsidy
• Co-payment required for ambulatory care,
  impatient care and pharmaceuticals

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Service Model under the NHI
The Insured (people enrolled in NHI scheme)
Healthcare Providers
Copayment
Medical Services
Premium
Payments
NHI Cards
Medical Claims
Bureau of NHI
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Premium Contribution Shares (2003 premium rate
4.55 of monthly salary)
Unit
13
Distribution of Public and Private Healthcare
Resources (Year 2004)
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Benefit Coverage

• Western medicine
• Inpatient care
• Outpatient care
• Ambulatory care
• Laboratory tests
• Prescription drugs
• Day care for the pscyhatrics
• Home care
• Some preventive services eg. health check-up
• Chinese medicine
• Dental service

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Copayment for Ambulatory Care
UnitUSD
Copayment exemption catastrophic diseases, child
delivery, preventive health services, medical
services offered at mountain areas or offshore
islands, low-income households, veterans,
children under the age of 3
(1 USD 35 NTD)
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Coinsurance for Inpatient Care
(Acute Care)
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Exemptions of Copayment

• Catastrophic diseases
• Child delivery
• Preventive health services
• Medical services offered at the defined mountain
  areas or on offshore islands
• Low-income households
• Veterans
• Children under the age of 3

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Benefits to the Disadvantaged Group

• 100 premium subsidy for low-income households
• Partial premium subsidy for the disabled, and
  elderly people residing in Taipei and Kaohsiung
  city
• Premium Relief payment by installment, referral
  to charity groups, delayed premium payment
  dateline, premium waiver

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Characteristics of the Healthcare System

• Dominated by the private sector
• Closed-staff system for hospitals
• Patients are free to choose care providers
• No gate-keeper system for outpatient visits
• High service volumes in outpatient department in
  most hospitals

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Problems and Challenges

1. Aging Problem
2. Utilization imbalance of medical service
3. Revenue and expenditure

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Demographic Trends

• Aging Problem

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Life expectancy

• In 2004
• Average was 76.5 years
• Males was 73.6
• Females was 79.41

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In the 2005 population 18.8 under age of
14 71.6 between the ages of 15-64
9.6 above 65 years In the 2051 population
projections 8.9 under age of 14 55.6
between the ages of 15-64 35.5 above 65
years
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Demographic Trends

• Index of aging
• 1995 was 17.1
• 2004 was 49.0

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Dependency Ratio

• Dependency ratio of aged over 65 was increasing
• 13.4 in 2005
• 13.7 in 2006
• 63.8 in 2051

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Population Aging impact on Health Service

• The elderly use more health care service than
  other demographic group
• Treatment rates (outpatient inpatient) for the
  age gt65 is higher than other ages group
• More likely to suffer from chronic disease or
  catastrophic illnesses e.g. Malignant neoplasm
  CVD

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65/0-64 per Capita NHE RatioInternational
Comparison

• In 2000, the 65/0-64 per capita NHE ratio was 4.6

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The 65/0-64 per capita NHE ratio is calculated
by dividing the per capita NHE among the
65-and-over age group by the per capita NHE among
the 0-64 age group. This ratio tells us how
many times higher medical expenditures among the
elderly are than medical expenditures among the
0-64 age group.
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The ROC 65/0-64 per capita NHE ratio was 3.9 in
1998, and rose to 4.6 in 2000. In comparison
with other countries, the ROC 65/0-64 per capita
NHE ratio was only lower than Canada and
Japans 4.9 (1997) equivalent to the United
States 4.6 (1995) higher than most OECD member
countries.
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Utilization problems

• ?Utilization rate
• Imbalance utilization of medical
• services

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Utilization problems
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?Utilization rate (1994-2000)

• Population grow - ? 5.2
• Outpatient visit - ?16.6
• Emergency visit - ?42.2
• Outpatient surgery - ?56.4
• Inpatient surgery - ?19.7
• Inpatient hospitalization - ?18
• M.C Tsang, Taiwans New NHI program
  Genesis and Experience So Far Health Affair,
  2006

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DOH.TW
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Utilization problems Demand Side

• Doctor Shop
• Lack of referral system
• Free access to health services
• Most preventive services are completely free
• No rationing of care
• Low cost sharing

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Utilization problems Provider side

• Professional fee (PF) system
• Profit-driven motives
• Drug price black hole feature

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Impacts on Healthcare System

• ? Expenditure
• ? Quality of medical care
• ? Effective usage of resources

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Revenue Expenditures

• NHI adopts a self-sufficient system
• Insurance premiums to cover expenditure for
  purchasing health

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Medical Expenditures
Total Spending in 2004 NT 385 billion (US11
billion)
Inpatient Care
NT135 Billion
Ambulatory Care
NT250 Billion
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NHI Financial Challenges

• ? expenditure larger than ? revenue
• Budget imbalance
• Deficit in annual budget since 1999
• Reserve Fund nearly exhausted

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Growth in Expenditure

• Aging of population
• Advance of medical science and technology
• Utilization imbalance
• Peoples rising medical expectations

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Save Cost / Cost Containment Initiatives

• Global budgeting
• Control drug expenditures
• Penalty on providers on misuse of medical
  resources and cheating
• Efficient use of resources

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Premium Rate Structure

• Low as compared with other countries with similar
  social health insurance set up
• Taiwan - 4.55
• Canada - 11
• France - 19.6
• Germany - 13.8
• Japan - 8.5

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Increase Revenue

• ? premium rate (increase from 4.25 to 4.55 of
  monthly salary in Sept 2002
• Active collection of premium debt from local
  governments

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Barriers to NHI Budget Balance

• Taiwan already passed the high economic growth
  stage.
• ? Unemployment rate
• Political environment against increase in premium

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• Thank You !

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• Q A

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Acknowledgement Cheng, T. M. Taiwans new
national health insurance program genesis and
experience so far, 22(3), Health Affairs. The
Policy Journal of the Health Sphere. Liu, S. L.
(2005). Evaluating the efficiency of the use of
medical resources in Taiwans medical care
network An application of data envelopment
analysis, Institute of Health Care
Management.The Republic of China Yearbook
Taiwan 2002(http//www.gio.gov.tw/taiwan-website/
5-gp/yearbook/2002/)The Republic of China
Yearbook Taiwan 2003(http//www.gio.gov.tw/taiw
an-website/5-gp/yearbook/2003/)The Republic of
China Yearbook Taiwan 2004(http//www.gio.gov.t
w/taiwan-website/5-gp/yearbook/2004/)The
Republic of China Yearbook Taiwan
2005(http//www.gio.gov.tw/taiwan-website/5-gp/ye
arbook/)