taiwan healthcare

8/9/2019 Taiwan Healthcare

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Introduction

Health care is a provocative issue that is seen by some as an important responsibility

for the state and one that should be provided for all citizens. Others view health care as a

private matter and any attempts at state intervention or control as a violation of privacy and

freedom.

As some Asian economies, such as Taiwan, Hong Kong, and South Korea, have

shown miraculous! economic development over the past few decades, they have also shown

important initiative in bettering the social environment for their citizens. Some authors even

argue that the economic growth of nations such as South Korea and Taiwan cannot be

separated from its developmental state "H.#$. Kwon, %&&'(. )t is often reported that the fast

pace of economic growth in Asian economies was made possible by government investments

in health care and education, along with other governmental programs such as land reform.

This paper will loo* at the three economies of Taiwan, Hong Kong, and South Korea

and the health care systems that developed in each. ) hope to show that there is not one right

way to create a wor*able health care system, but factors such as history and culture come

together to shape the ideas of what the system needs to do and be. Although there are cultural

similarities, such +onfucian ideas, that are common to each case discussed, the history and

how these ideas helped to shape the health care system are all different.

The paper is divided into two sections. The first section will loo* at each health care

system independently. )n this section a short history and bac*ground of how each system

came into creation. The second section will be a short discussion that will loo* at the systems

together and positives and negatives of each system.


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Taiwan

Taiwan is the relative newcomer to universal health coverage in Asia. Taiwan created

ational Health )nsurance in -' to provide health insurance for all it citizens. Taiwan has a

long history that includes different ruling governments. /ach government has its own uni0ue

characteristics and policies, but each one can also be said to have built on or borrowed

structures that were left by the previous rulers. 1or e2ample, the 3apanese used the pao-chia

system that was started during the Kong2i era to *eep trac* of the local Taiwanese population

"+.#+. +hen, -4'(. This section will loo* at the historical evolution of the different health

care systems that have occurred on Taiwan.

5ost scholars begin their study of Taiwan6s public health care systems with the start

of the 3apanese colonial period. )n -7' Taiwan was ceded to 3apan according to the terms of

the Treaty of Shimonose*i and the 3apanese government 0uic*ly found that the greatest threat

to the 3apanese troops was disease. 5uch of this had to with the fact that Taiwan is a

subtropical island with very dense foliage. The 3apanese troops were being e2posed to viruses

and bacteria they had never been e2posed to before. Another reason could be the during that

time period there were large outbrea*s of the plague that happened in Taiwan as it did in

many other places in Asian.

)n order to combat this threat to the troops the 3apanese set up committees to

investigate infectious diseases. )n -7 the )nvestigative +ommission of )nfectious 8iseases

was established to research the causes and prevention of infectious diseases. 9hile this

research might have helped society at large it generally understood that it was underta*en to

help 3apanese military, political, and trading interests. )n other words, :ublic health is

important not because individuals had the right to a healthy life but because the good of the

state demands a healthy citizenry! "+hin, -7(.


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The 3apanese also used its police system to impose public health initiatives. 9hen an

infectious disease epidemic occurred in an area, the police force was sent there to force

0uarantines. The police force was also responsible for performing $obs that related to

sanitation such as cleaning gutters and inspecting food "+hin, -7(.

The 3apanese also controlled the public health system by controlling education and

practice. The medical department was set up at Taipei )mperial ;niversity.


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These changes did have impact on public health. The infant mortality rate dropped

from ='@ in -'% to '@ in %&&%. ife e2pectancy also increased for males and females in the

same time period. 1rom '4 and B- years in -'% to 4' and 7- years in %&&% respectively "u

C +hiang, %&--(.

1igure - shows the improvements that were made from -B& onward in Taiwan6s

health care system. The main focus for the >O+ government early on was to increase the

number of practicing physicians per -&&& people. One way they dealt with this was to use

retiring military doctors to fill the demand in the -4&s. >etiring military physicians were

able to ta*e a special e2am to receive a license.


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Figure 1 Basic and health care indicators: Taiwan, 1960-206(Lu & Chiang, 2011

)n -', the egislative Fuan passed the H) Act. The H) was implemented five

years ahead of schedule. This is due partly due to the public6s demand for universal health

care coverage and also due to political compromise. As would be e2pected, the accelerated

release was chaos. The approval rating for the program started at G&@ in April -' went to

''@ in 3anuary of -B and stays around 4&@ today, ma*ing it one of the most popular

government programs "u C +hiang, %&--(. Also the percentage of insured has risen from

'4@ when the program started to 4@ of the population ">. Dauld et al., %&&B u C +hiang,

%&--(.


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Figure 2 !ercentage o" !o#ulation with health insurance Taiwan 19$9-199$ (Lu & Chiang, 2011

Taiwan6s ational Health )nsurance is a single payer system with a uniform fee

schedule and a global budget "+hiang, -4(. The system is also characterized by freedom of

choice. This is credited to the high value placed on a mar*et economy in Taiwan. )t also leads

to strong competition between hospitals who, because of fi2ed fees, compete by trying to

offer better 0uality services "H. +hang, +hang, 8as, C ), %&&=(. ;nli*e the ;nited Stated

managed care model the Taiwan6s H) offers the insured complete freedom of providers and

services "T.#5. +heng, %&&G(. One problem with this type of universal coverage is moral

hazard, which Taiwan tries to prevent by re0uiring copayments that vary for different

services. About B%@ of Taiwan6s healthcare e2penditure is funded by the public sector with

the other G7@ coming from private spending, which is mostly out#of#poc*et. Taiwan spends

B.-@ of D8: on healthcare which is way below the O/+8 average of 7@ "+oopers, %&-%(

but second to 3apan in spending in Asia ">. Dauld et al., %&&B( .


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Hong Kong

Hong Kong is a former epublic of +hina in -4. )t is considered one of the most westernized societies in

Asia due to -'& years of .

Dauld et al., %&&B(.

The cost of the Hong Kong health system is around '.B@ of gross domestic product,

which well below the O/+8 average of 7@. :ublic funding accounts for 'B@ of total

spending with private funding accounting for ==@. The ma$ority of public funding comes in

the form general ta2 revenue. The ma$ority of private funding comes from out#of#poc*et

e2penditures, which comprises a mi2 of private insurance plans and employer provided

benefits "Dabrial 5. eung et al., %&&'(.

The mi2ed health economy where a public ational Health Service operates along

side a large fee#for#service private sector can create an environment that is hard to regulate.

9ith the large number of agencies that are involved within the health sector it can be hard for

the government to enforce needed controls li*e 0uarantines. An e2ample of this was during

the SA>S epidemic where compartmentalization created problems when no single part of the

health care system was responsible for coordination, and communication between the sectors

was difficult. )t was also problematic that the 8epartment of Health has no legal powers of

intervention ">. Dauld et al., %&&B(.


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Figure % n o'er'iew o" the ong )ong health s*ste+ (arial ./ Leung et al/, 200


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South Korea

:rior to South Korea6s universal health care program, its health care system was urban

based and mostly private in -4' with only 7.7@ of the population covered ":eabody, ee, C


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include firms that had -&& or more employees and in -7G it was e2panded to include those

with only -B wor*ers. Today firms are re0uired that have ' to -' employees ":eabody et al.,

-'(.

A second stage was created that included government wor*ers and private school

teachers. This was e2panded in -7& to include e2tended families of military personnel. The

insurance was provided by the Korean 5edical )nsurance +orporation ":eabody et al., -'(.

The above two schemes still left out a large percentage of the population, namely self#

employed wor*ers. This was fi2ed by creating programs that were subsidized by the

government. There was also a special program to provide free health insurance for the poor

":eabody et al., -'(.

The current program receives about ''@ through public financing using ta2es and

social insurance. The remainder "='@( is financed from private sources with G4@ of that

being from patient payments ":eabody et al., -'(.


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Figure rgani3ation o" +edical insurance * grou# and * insurance societies in the 4e#ulic o" )orea (!eaod* et

al/, 199


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South Korean has also wor*ed to increase the availability of services to its population.

Hospital beds have increased from %-,&&& in -4' to 7&,&&& in -74. The government has

also wor*ed to open clinics in rural areas to provide those communities with access to

medical care. Almost all of the new hospitals and clinics have been private. The number of

physicians has increased as well as the number of medical schools. :hysician numbers have

gone up from one per %'&& population in -44 for one physician per --B& in -7=, while

medical schools have more than doubled from -= to G- ":eabody et al., -'(.

Discussion

/ach one of the above health care systems is uni0ue to its population. 9hile at the

onset of this research ) had thought ) would compare each and be able to some up with an

idea of which one wor*s better than the others. After researching, however, ) have found that

the uni0ueness of each system, along with the population it serves, ma*e such a comparison

of better or best not only hard but not useful. ) feel it is better to loo* at each and the possible

challenges it faces along with its strengths and learn how each can be improved.

One of the challenges they all face is controlling rising health care costs. The fastest

way to deal with that has been to raise copayments or government subsidies. One puts a

burden on the population directly while the other can impact the government deficits and hurt

programs in the long run.

Systems li*e Hong Kong and Taiwan are considered to be ris*y by the fact there is no

gate*eeper to restrict over use of services by certain populations that would as a result drive

up costs. /ach system deals with this issue by a schedule of copayments that discourage

overuse or e2cessive and repeated therapies. Taiwan6s information system is also well *nown

for coordinating patient information and usage in an easy and efficient way that ma*es it

easier to *eep trac* of patients to prevent repeated services by different doctors.


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Taiwan also has an advantage of being a single payer system. A single payer system is

believed to be more efficient from an administrative standpoint. ess man#hours are needed

loo*ing at different fee schedules or organizing payment to and from different sources

"Hussey C Anderson, %&&G(.

Another problem that faces all systems is rising drug costs. This is especially a

problem in Hong Kong and Taiwan. )n the past in Hong Kong the price of physician visit and

medication was bundled together in a way that led some to believe that physicians were over

prescribing medicine to increase their billing "Dabrial 5. eung et al., %&&'(. This has also

occurred in Taiwan where drugs are billed with a different copayment or sometimes,

depending on the drug, paid out of poc*et. There have been criticisms that this had led to over

prescribing in order to increase profits that are loc*ed into a global price system "u C

+hiang, %&--(. 9hile this obviously is concerning because of increased for patients, it also

creates a potential public health ris*. Over prescribing of antibiotics for instance has bee

thought to lead developing antibiotic resistant bacteria such as tuberculosis.

South Korea6s strong +onfucian values are thought to play a positive role in

controlling health costs. )t is believed the strong family values have decreased the need for

nursing homes in the country. ;nli*e the ;nited States, most terminal patients in South Korea

prefer to stay at home to be ta*en care of by their family. This is thought to be the reason for

the low number of nursing homes that mainly provide services to elderly patients that do not

have family to ta*e care of them ":eabody et al., -'(. )n 3uly of %&&& South Korea merged

more than G'& insurance agencies to create a single insurer system. )t is thought that creating

one larger insurer provides benefits such as better capacity for ris* pooling "S. Kwon, %&&G(.

Conclusion


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The economic growth paired with the idea that governments should provide services

for its citizens. This idea is often lin*ed to the patriarchal views of +onfucianism, which

permeate Asian society. The combination of strong belief in free mar*ets with +onfucian

ideals has countered neoliberal arguments that globalization ma*es the welfare state

unimportant.

Taiwan developed its current healthcare system later than most of its Asian neighbors.

The ational Heath )nsurance Act was passed in -' and 0uic*ly covered more 4@ of the

population. 8espite its rushed implementation, it overcame initial chaos to become one the

most popular government programs reaching approval ratings as high as 4&@.

Hong Kong system is more mi2ed due to the free mar*et health care that grew along

side the


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esponse to a

Dlobal


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