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NHI Deputy Chief Tsai Shu-ling

Lower Payments Aim to Save Public Money

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Lower Payments Aim to Save Public Money

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Taiwan's national health insurance system is lauded as one of the world's most effective, but it faults were recently exposed after a water park disaster. National Health Insurance Administration deputy chief Tsai Shu-ling admits reforms are needed but warns that there are no perfect solutions.

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Lower Payments Aim to Save Public Money

By Whitney Huang, Ming-ling Hsieh
From CommonWealth Magazine (vol. 576 )

Taiwan's health system seems to be ill-equipped to cope with the hundreds of burn victims from the recent dust explosion at the Formosa Fun Coast water park. The catastrophe of unprecedented scale exposed the system's ills, such as overworked medical personnel, manpower shortages, overcrowded emergency rooms, insufficient health insurance payments to medical institutions and a misallocation of resources. Crucial for health care reform is a revamping of the national health insurance scheme.

Tsai Shu-ling, deputy director general of the National Health Insurance Administration, believes that achieving a fair allocation of resources counts among the most difficult issues. Despite continued negotiations, adjustments and reviews, no single solution will make everyone happy. How does Tsai, who looks back on a two-decade career in national health insurance, plan to respond to the calls for a sweeping reform of the NHI system?

 The following are excerpts from an exclusive CommonWealth Magazine interview with Tsai:


CommonWealth: Does Taiwan have enough plastic surgeons?

Tsai: Normally, we do not have a high demand for plastic surgery except for non-medical, cosmetic purposes.

Demand for medical care keeps changing with the times. Prenatal exams, for instance, have advanced so much that congenital diseases are becoming more and more rare. Consequently, no one wants to go into pediatric surgery because there is no demand.

In hospitals, pediatric surgery belongs to the loss-making departments. Since there are so few patients, such departments do not make money for the hospitals. But, of course, we still need to retain pediatric surgeons. The only problem is that some physicians are not willing to go into certain medical specialties given their decline.

Q: How about the NHI payments to hospitals for plastic surgery procedures?

A: Payments for plastic surgery are actually quite good. Hospitals consider this field another loss-making business because demand is low, for the same reasons as pediatric surgery.

The hospitals argue the NHI must pay more [for their respective services] if departments with weak demand are to be supported. From this standpoint, won't we then have to pay less to those departments that are doing "good business," such as orthopedics?

But when you ask the orthopedic surgeons, they will say we give them too little. No matter what kind of specialist physician you ask, they will all tell you that we don't pay enough. We would, of course, like to pay more, but we do not have sufficient [NHI] premiums [to cover the payments to health care providers]; that's the problem.

Payments Repeatedly Adjusted

Q: Does that mean if some specialties want higher payments, others will see reduced payments?

A: There is only so much money in the budget every year. We can only pay the agreed-upon amount.

We have also adjusted the reimbusement standards many times. A while ago, the five major specialties [internal medicines, surgery, obstetrics and gynecology, pediatrics and emergency medicine] all suffered manpower shortages. We compiled an additional budget of NT$5 billion, which will add up to nearly NT$10 billion over a period of three consecutive years. We respect the opinion of medical circles when we examine which standards should be adjusted. We have been adjusting our payment standards not just these three years, but continuously over the past 20 years. But there will never be a perfect solution, because someone will always be able to complain that payments for certain items are too low.

Q: Wouldn't hospitals be more flexible in dealing with accidents such as the recent dust explosion disaster if the emergency departments were less crowded?

A: I agree.

Q: What can the NHI do to solve overcrowding in emergency departments?

A: You first need to examine why the emergency departments are crowded. That's a highly complex matter.

Some feel it is because too many lightly injured patients rush to the emergency department, so relevant information campaigns should be reinforced, or the copayment burden on patients should be heavier.

We have mentioned increasing copayments [by the insured], but representatives for [NHI] premium payers like the Consumers' Foundation are adamantly opposed [to this idea.] They think that patients are not able to judge by themselves whether they need emergency care.

Furthermore, it's not that the emergency department of every medical center is crowded. After initial treatment at the emergency department, patients must be sent to the right place, such as to the operating room or the ICU.

Hospital policy is also very important. Is the hospital making arrangements based on the level of emergency? Do the outpatient and inpatient ratios differ? Are decisions based on patient needs or on physicians' preferences? In the end, inside the hospital it is crucial that arrangements are made based on a priority order.

Recently, Minister of Health and Welfare Chiang Been-huang vowed to lower the ranking of medical centers if any patients spent more than 48 hours in their emergency departments.

Others point out that emergency physicians have a very tough job, and the money from the NHI reimbursement is insufficient. We have adjusted the payment standards upward. After the adjustment, reimbursement for emergency triage for level-3 patients became three times that of the outpatient diagnosis fee. We do whatever we can to encourage emergency physicians. Q: What about nursing personnel and payments?

A: The reimbursement for nursing care is probably not high enough. That's why we have adjusted it a few times, and this year we will adjust it again.

However, nursing personnel accounts for the highest share of medical personnel, so that a minor adjustment leads to an enormous total figure. Starting in 1998, we compiled a 7-year-budget of NT$10.1 billion to encourage hospitals to raise nurse practitioner salaries or hire more personnel. Meanwhile 7,522 more nurses have been employed.

The NT$10.1 billion are funded from NHI premiums. Given limited NHI resources, everyone tries to redistribute resources as best as they can, but will the money then be enough? No one thinks so.

Payments will never be "Reasonable"

Q: Does the NHI consider its payments reasonable?

A: No, we have never claimed these are reasonable. Who is going to determine what is reasonable? No one. Eventually, the current price can only be decided in negotiations between the NHI and the medical profession.

But are these prices reasonable? There will always be someone who believes they are not reasonable, so there will always be room for further review and discussion. We can only make gradual adjustments throughout the process.

We insurance people are standing on the side of the insured. We always endeavor to cut expenses because this money comes from the premiums that everyone pays. We must see to it that patients can buy something inexpensive, good and valuable. Therefore, we will always play the role of the penny pincher.

Q: People from the medical world like to point out that NHI payments of NT$10,000 or NT$20,000 would amount to the same amount in U.S. dollars if we were in the United States.

A: If someone puts it this way you can tell them that in the United States medical expenses account for 17 percent of GDP, whereas ours stand at 6.6%. The U.S. is a huge exception from worldwide standards; you cannot use their prices for comparison

Q: It's said that Taiwan cannot even compete with China anymore.

A: It depends on which area in China you're comparing us with. China's wealth gap is very big. Taiwanese physicians who are recruited to work over there will be probably given special treatment, but that does not mean it is generally the case.

Q: What is the most difficult aspect of your job at the NHI?

A: The most difficult part is, of course, the fair distribution of resources. The NHI gets its mandate from the entire population. We represent all patients nationwide in negotiating prices with the medical profession. Then, we send money from the collected premiums to where patients need it.

This is our responsibility. However, therein also lie the greatest difficulties. You won't find a perfect solution; you can only continue to negotiate and discuss these issues with representatives from the medical world. This problem can never be solved. But is this wrong? We should take this to another plane and ask ourselves whether our healthcare is actually improving over time.

Translated from the Chinese by Susanne Ganz

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