TAIWAN'S SINGLE PAYER SYSTEM.
Via Merrill Goozner, CQ has a nice article on Taiwan, who decided, in 1995, to rebuild their whole health care system. They studied about a dozen systems worldwide and eventually settled on a unique version of single payer that preserved a lot of room for electronic infrastructure advances and patient autonomy. The results?
The climate now in Taiwan is a marked contrast with its situation before its adoption of a single-payer system of universal coverage in 1995. Only 59 percent of the population had health insurance at the time, and health costs were growing at double-digit rates. Now 99 percent of the Taiwan population is covered and health costs are growing between 4 and 5 percent annually.[...]It's important to put this simply: They cut cost growth. They went from double digits to a modest four or five percent. The system outran GDP growth last year, but by an amount so trivial that it was equal to a bit over a week of the system's operating costs.Taiwan also relies on global budgets to keep costs under control. Payments are based on a point system that measures the level of health care resources being used. The payment rate per point drops if doctors are ordering so many appointments, tests, and procedures that the cap is likely to be exceeded. Points are recalibrated every three months and doctors respond to changes, seeing fewer patients if point values drop, Hou says. But payment rates for critical care are not adjusted based on utilization, he adds.
Having just one payer eases uniformity of billing and payment systems unlike a system in which multiple insurers compete for profits. Administrative costs average below two percent of all health spending in Taiwan. In the United States, however, administrative costs gobble up 15 to 30 cents of the health care dollar, analysts say.
The single-payer scheme also gives the government strong leverage to set prices. Doctors “are paid much less than in the United States,” Hou says. “The private sector is rather weak. We are good in bargaining.”
Indeed, T.R Reid, in his Frontline documentary Sick, has a long portion on Taiwan; the development of their system and how it works. Everyone, for instance, gets a "smartcard," which has to be swiped for them to access care. When the card is read, their medical record pops up, the pipeline opens for the government to reimburse the provider for their care, etc. It's all tremendously impressive, and you can watch the whole segment here. It'll make you feel like crying next time a doctor opens your manila folder and tells you to talk to his billing specialist on the way out.
Image used under a Creative Commons license from Matthew Fang.
Feeds: 


COMMENTS (12)
oooooooo... that sounds good!
Let's see who would be rabid in the US if we pushed that:
- MD's and other providers
- Health Insurance Companies (double-bad rabid)
- the GOP: their contribution accounts would wither
- Assorted libertarian/wingnut groups shouting 'communism'
- Drug Companies (looking at their profits if they are included in a Taiwan-like program).
- Media firms that would lose major advertizing bucks.
So, let's see which major interest groups would support this?
- dirty f**king hippies of all sorts
- commies in the gov't.
- tax-raising libruls in Congress
- al queda
- islamofascists
- child predators
- /snark
Wanna bet which side would prevail?
Ah, sweet reason. Too bad we passed the reason-peak 3 decades ago.
Posted by: JimPortlandOR | June 17, 2008 2:11 PM
[closing Ezra's left-open italics tag]
Posted by: JimPortlandOR | June 17, 2008 2:13 PM
[I thought...]
Posted by: JimPortlandOR | June 17, 2008 2:15 PM
"The single-payer scheme also gives the government strong leverage to set prices. Doctors 'are paid much less than in the United States,' Hou says."
Physicians abroad may make less than American counterparts, but they also pay a fraction of the cost medical education.
Any discussion of cutting physician salaries without talk of fully subsidizing medical education is a non-starter.
Kevin
Posted by: Kevin, M.D. | June 17, 2008 2:18 PM
Taiwan (or France!) is a good example of how you use IT to save money in healthcare. It's a universal system that allows quick access to a patient's entire medical record, not just what each individual doctor or group accumulates. System support is provided and maintained by the government so that individual practices are not required to add IT staff.
Compare that to the far less promising American model. My group spent $1.5M last year to buy EHR software -- one of about 8 competing, non-intercompatible products -- and we are hoping to actually be able to start using it this summer, 18 months after purchase. Of course, it isn't compatible with our current system, so data is being transferred by hand. Additionally, it won't have access to any data from outside of our primary care group, so no access to hospital records, specialist referral records, or older records. We're lucky that as a large group, we already have an IT department and won't need to expand it with the change.
Like most physicians, I don't see much marginal benefit from replacing paper records with an EMR. Of course, the real reason that U.S. physicians resist the implementation of EMR is that we are all non-technical luddites....
Posted by: J Bean | June 17, 2008 3:26 PM
Its not true that Taiwan docs get paid substantially less than Americans. Taiwan docs act as pharmacists and sell drugs directly to patients (which doesnt happen in the US except for oncologists). Although Taiwan reimbursement rates are less than in the states, Taiwan docs make up fo r the shortfall by scripting more drugs and selling them directly to patients. This means that the overall incomes are pretty close between the countries.
Posted by: Anonymous | June 17, 2008 5:22 PM
Here's more evidence that Taiwan docs and hospitals make a lot more money from selling drugs directly to patients:
http://content.healthaffairs.org/cgi/content/full/22/3/61
According to a December 2002 study report by the DoH, close to half of the doctors in Taiwan prescribe four to five drugs per visit for upper respiratory infections, and 10 percent prescribe more than eight drugs; in only fourteen of 103,024 outpatient visits did the doctor not prescribe any drugs.
In the USA, I'd guesstimate that less than 10% of american docs script any drugs for URIs.
The Taiwan docs are clearly not following well established standards of care.
Posted by: Anonymous | June 17, 2008 5:28 PM
There's also good evidence that the quality of healthcare in Taiwan is suspect:
According to the previously cited chairman of the DoH Quality Commission, "When patients in Taiwan are faced with life-threatening illnesses, although their economic burden is reduced [by the NHI], the probability of their losing their lives is several times greater than it is in the U.S. For example, survival for all cancers in Taiwan is half the rate in the U.S., deaths from anesthesia is eight times that of the U.S., deaths from tuberculosis is ten times that of the U.S., antibiotic resistance in streptococci [sic] pneumonia is the highest in the world."53 In its April 2002 global budget report, Taiwan’s DoH concurred that "the policy of low cost insurance with prices frozen, which resulted in ‘fast-food health care,’ has seriously negatively impacted on both the quality of care and the medical environment."54
Posted by: Anonymous | June 17, 2008 5:37 PM
Has their been any research on Group Health Coop in Seattle/King County?
When I get care, they have to type my number in, instead of swiping it, but then they have all of my records from when I first joined the co-op -- x-rays from years ago are readable onscreen in two clicks, etc.
(I have individual coverage, so my monthly premium is high, but) copays seem very straightforward, too, and I've never had a doctor change their mind about a treatment because of not getting approval from higher-ups.
Are they a blip, or the future?
Posted by: sherrold | June 17, 2008 6:37 PM
Everyone, for instance, gets a "smartcard," which has to be swiped for them to access care. When the card is read, their medical record pops up, the pipeline opens for the government to reimburse the provider for their care, etc. It's all tremendously impressive, and you can watch the whole segment here. It'll make you feel like crying next time a doctor opens your manila folder and tells you to talk to his billing specialist on the way out.
Arnold Kling (not me) on teh same:
http://www.american.com/archive/2008/june-06-08/how-to-fix-healthcare-delivery
Electronic medical records represent another false panacea. Paper records are a symptom, not the cause, of fragmentation and mismanagement. A dysfunctional process will not be turned around simply with a new computer system. Information technology can be used successfully only after procedures have been rationalized and reorganized.
The autonomous, self-directed doctors produced by our medical schools are not suited to treating complex patients. Instead, what we need are team players, implementing consistent corporate policies. Independent skilled craftsmen, flying by the seat of their pants, can add a deck to your house. That will not work for building a skyscraper.
Posted by: Floccina | June 18, 2008 11:15 AM
Taking the same quote from above:
According to the previously cited chairman of the DoH Quality Commission, "When patients in Taiwan are faced with life-threatening illnesses, although their economic burden is reduced [by the NHI], the probability of their losing their lives is several times greater than it is in the U.S. For example, survival for all cancers in Taiwan is half the rate in the U.S., deaths from anesthesia is eight times that of the U.S., deaths from tuberculosis is ten times that of the U.S., antibiotic resistance in streptococci [sic] pneumonia is the highest in the world."53
There's always room for improvement in any health care system, but I'd like to look a little deeper into these statistics. Cancer survival rates are impacted not only by treatment, but by the lack of prevention, some of which is cultural - how do societies deal with the concepts of cancer? How do they promote early intervention?
As someone who lived in Taiwan for three years, and was covered under their national health insurance system, and spent a lot of time in hospitals and health clinics, I would like to note that there is certainly still a stigma around certain chronic diseases that impacts the ability to engage in prevention and early detection efforts.
Posted by: Anonymous | June 18, 2008 12:48 PM
An Anonymous poster wrote:
I would like to note that there is certainly still a stigma around certain chronic diseases that impacts the ability to engage in prevention and early detection efforts.
This factor would also tend to reduce costs.
Posted by: Floccina | June 19, 2008 9:12 AM