A 'Sweatshop Healthcare System' Won't Make Progress
While foreign media and experts heap praise on Taiwan's "utopian" 20-year-old national health insurance system, many in the island's medical profession lambast it as a "sweatshop system." A former health minister expresses strong opinions about the system's ills.
A 'Sweatshop Healthcare System' Won't Make ProgressBy Sara Wu, Whitney Huang, Ming-ling Hsieh
From CommonWealth Magazine (vol. 577 )
Lin Fang-yue, who turns 65 this year, retired as superintendent of Taipei Veterans General Hospital earlier this year after six years in office. On August 1, the cardiovascular surgeon will assume his new post as president of Far Eastern Memorial Hospital in New Taipei City's Banqiao District.
Lin, a respected authority in his field, has headed two of Taiwan's leading hospitals – National Taiwan University Hospital and Taipei Veterans General Hospital. When Ma Ying-jeou, Lin's schoolmate at the prestigious Taipei Municipal Jianguo High School, became president in 2008, Lin put their old friendship above career considerations, giving up his post as superintendent of National Taiwan University Hospital two years before his term ended in order to serve as health minister.
He has previously publicly criticized the NHI as a badly designed system that causes the maldevelopment of healthcare in Taiwan. Lin has also warned that the public healthcare system will collapse within five to ten years if the NHI does not undergo sweeping reform.
In this exclusive interview with CommonWealth Magazine, Lin reiterates his appeal for the far-reaching reform of the NHI system. He believes that the NHI and public health are a set of values that must not be considered in monetary terms. Following are excerpts from the interview:
Q: Where should NHI reform begin?
A: When the NHI was incepted in 1995, it leaned toward Socialism. Does Socialism have advantages? Of course it does, it has social justice. People who do not have money are also able to obtain medical care. Therefore, everyone thinks that Taiwan's NHI is very good. By spending very little money, you can achieve medical justice; people won't become poor because of an illness. However, in the beginning [the NHI] was designed in a hurry, due to time pressure. Reimbursements for many of the various medical specialties were not very appropriate, which affected the development of these specialties. One of these is pediatrics. Since children generally need just one fourth of an adult dose of medication, [NHI] reimbursements are also only one fourth, which is unreasonable. Reimbursements for many severe disease specialties are actually very low. But things are slowly improving now.
Solution No. 1
Change the Total Budget System
The concept of a total budget is not bad because it avoids spending too much money and eroding the nation's finances.
Under the current total budget, the NHI premiums that will be spent during the current year are determined first. For example, if there is only NT$20,000 [from the NHI total budget] but [the hospital] uses 30,000 units, then reimbursements for every single point will decline to two thirds, because NT$20,000 divided by 30,000 is two thirds. If this approach drives up the costs for hospitals and clinics, they are bound to lose money.
Therefore, hospitals and clinics will do what they can to bring down costs by sacrificing good medicines, good instruments and reducing payments for medical personnel.
If there is no way to reduce costs, they will tell you to do more and raise efficiency.
That's an approach that Taiwan invented; at least I have not seen it anywhere else. It is an ingenious invention that created the sweat and blood [conditions] we have today.
Because of the total budget system, each hospital is forced to go for volume, to go for the total budget. As a result, [the reimbursement point value] declines from 90 percent to 80 percent and from 80 percent to 70 percent.
France also has a total budget system, but after it has negotiated this year's amount with you, the hospital files [for reimbursement] based on real expenses. Once the full amount has been claimed, it will stop [seeing patients.]
In France, I saw many hospitals that stopped [providing public healthcare services] in November, only providing international healthcare to self-payers or critical care services. The emergency department must definitely stay open, but the state grants additional funds for emergency medicine. All other medical staff take leave.
Physicians in France probably earn more or less the same amount of money as we do, but they live very happy lives. We need to think over whether we should make medical personnel toil that hard or whether we should let them live happy lives too. Only if we let them treat their patients very happily will they be able to think and act in terms of the long run.
Before, when I was at the Department of Health [now the Ministry of Health and Welfare] I once told them that we should look for a new approach, that we should not use our current total budget method.
Q: As DOH minister, you once suggested that the state adopt a unified medicine procurement policy. Why?
A: When I served as deputy superintendent at National Taiwan University Hospital, the then superintendent, Lee Yuan-teh, arranged a trip to France for him and me to visit some pharmaceutical makers and French health insurance officials. At the time, we had a main topic, which was medicinal drugs.
In the past, the situation in France and Taiwan used to be the same; the pharmaceutical makers were all very small and not internationally competitive. However, following reforms, these pharmaceutical makers were merged into three or four large pharmaceutical companies who were able to export their drugs to Taiwan. We wanted to know how they had managed to achieve this.
France actually opened up competition. Medicines for the whole country were uniformly procured. Their health insurance determined how much a certain drug could cost, and then pharmaceutical companies from around the world would compete [for the order]. But the drug price not only had to be low, they also demanded quality and testing. Therefore, the small factories in France couldn't survive; they were merged into three or four large manufacturers that gradually improved until they were able to compete internationally.
After we came back, I suggested that Taiwan could learn from France. [Drug] procurement should not be left to the hospitals; instead, the NHI should decide how much a drug costs. There is Aspirin, for instance, that costs NT$1, and there is Aspirin that costs NT$0.2 [per pill]. You could stipulate that you want the quality [of the Aspirin] that costs NT$1. Then all pharmaceutical makers will make increasingly better drugs, and the hospitals would not have to make money from differential drug pricing.
In France, they established three general dispensaries. They send the drugs to the hospitals box by box, packaging guaranteed intact so there are no loose pills. The medicines that you get at pharmacies across the country are all the same. If you can make money from buying drugs, then it is better to let the state make the money; why should making money be left to the hospitals? In order to save costs, Taiwan's hospitals now, of course, [procure drugs at] an increasingly lower price. As a result, the pharmaceutical firms make even cheaper drugs. The more they make, the less they can cover costs, so quality suffers.
[The quality of]Taiwan's drugs is very unstable, some drugs won't even help if you take 10 pills. Do we want such drugs?
Q: Why has the DOH not been able to reform the NHI?
A: They didn't dare to do it, I guess. Supposing that hospitals would see patients only until November, they were afraid the public would protest.
But why would the DOH be afraid of the people? This is a widespread government phenomenon, being afraid of the people. That's not right. You need to do what you think is right, you should not be afraid.
Q: What would people do if hospitals do not offer outpatient services anymore?
A: They can still go to the emergency department. Or they can also go to a clinic that is still operating. At an operating clinic, they will have to partly pay out of pocket.
Solution No. 2
Increase Out-of-pocket Payments
Therefore, the second direction that reform should take is increasing out-of-pocket payments for emergency and non-critical care.
Why is our healthcare so wasteful? why do people collect so much medication? It's because people pay too little out of their own pockets. In Europe, the out-of-pocket share is higher than ours; it stands at around 10 to 20 percent. In Japan, patients also need to pay 30 percent of the outpatient services fee.
The out-of-pocket share should be raised for non-critical illnesses or emergency medical care so that the NHI can use most of its funds for severe diseases.
It's because a lot of money needs to be spent at once for severe diseases, no matter whether it is surgery, or in the case of cancer for radiotherapy or chemotherapy. All these treatments cost so much money that people truly become poor. It's not the kind of money you spend on a doctor's visit for influenza.
If it is a poor household, the state should then help with additional funds.
The third direction the NHI should take is introducing a referral system
Solution No. 3
Higher Payments without Referral
At the grassroots level, many local hospitals are now going bust because the patients want to go straight to the medical center or regional hospital [to consult a doctor]. Because of that, the hospitals have become embroiled in an arms race that only intensifies over time as they buy all kinds of expensive instruments.
Presently, medical services in Taiwan are wasteful and characterized by oversupply.
In fact, the vast majority of local hospitals or grassroots [clinics] can solve the mild cases of disease found in the average patient. [You should]let the family doctor handle your family's medical history, check whether there are any hereditary diseases, discuss how to go about vaccination and how to bolster your health.
Q: Why has implementing a referral system proven difficult?
A: It is not compulsory. People are not forced to first visit a grassroots clinic or local hospital before they seek medical assistance at a medical center. Everyone thinks that their own illness is the most severe one; that's why they go to the medical center to see a doctor. They want to use the best instruments and think it would be best if they had a CT [computerized tomography] scan every day.
We should use the system to enforce referrals. If there has been no referral, a heavier co-payment should be slapped on the patient. If we made people pay a little more, everyone would weigh their options.
Q: Couldn't this issue be solved within six months or a year?
A: They don't dare do this. After I went to the DOH, I gradually realized that the biggest objective of our civil servants is to have a flawless record; they can't allow mistakes to happen, and they don't want to take a beating.
If, after a change of ruling party, these civil servants are not treated as the government's own people; if they aren't respected for their professionalism and looked after but rather treated as loyalists of the previous administration, this will cause problems. The civil servants will be intimidated, so why should they do anything for you? They will only make a move if they are told to.
The attitude within the entire government now is that doing less is better than doing more. It's fine as long as no incident occurs.
Q: Do we presently face an oversupply of medical services?
A: [The doctors] take on too many cases now. Originally, you were supposed to treat ten patients, but in order to seize cases you will do more than 10 patients. However, the point value for NHI reimbursements has slipped from a ratio of 1NT$ per point to NT$0.7 or NT$0.8 per point.
While your income will still increase, you will work more, working yourself to death.
Q: Is everyone competing on cost?
A: Correct. Yet this does not constitute a driving force for the progress of human society; innovation is probably the most important. However, how can medical personnel come up with innovative treatment methods and surgeries if they keep working so hard that they are sweating blood? They don't have time to think.
Value over Price
Q: The NHI aims to save money for the people, its thinking is price-oriented. Doesn't it lack long-term policy planning?
A: There Is no value-oriented thinking. The NHI or the health of the people is a value. If you put a price on all this, if all you think about is how much money you can allocate, then I think you lack long-term vision.
What we want is for everyone to be healthy, and that if by any chance you should fall ill, you will be able to get the best medical care in the world.
At the current stage, Taiwan largely is able to reach that standard, but it comes at the expense of our medical personnel.
When I served at NTU Hospital and Taipei Veterans General Hospital, I always hoped that our physicians would on the one hand know how to take care of their own health and secondly find time to think about innovations.
I believe if an industry or society does not have any innovations and only follows [others], it will not make any progress.
Translated from the Chinese by Susanne Ganz