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The Impact of Taiwan's National Health Insurance's 20-year Journey: How has the market responded and will respond?

The Impact of Taiwan's National Health Insurance's 20-year Journey: How has the market responded and will respond?

Audio and transcript from the Asia Health Policy Program seminar, "The Impact of Taiwan's National Health Insurance's 20-year Journey: How has the market responded and will respond?" on April 19, 2016, with Karen Eggleston,  Jui-fen Rachel Lu and Fred Hung-Jen Yang.


In 2015, Taiwan National Health Insurance (NHI) is celebrating its 20th anniversary since its historical inauguration in 1995. The NHI program, which provides universal health coverage (UHC) to Taiwan’s population of 23 million, has had a profound impact on Taiwan's health care market. This seminar will showcase Taiwan's NHI scheme, the challenges encountered, and the market responses.

The single-payer NHI program, operated by National Health Insurance Administration (NHIA), was established through integrating three existing social insurance schemes and extended the coverage to the then uninsured 43% of the population. Taiwan NHI offers comprehensive benefit coverage that includes ambulatory care as well as inpatient services. On the service side, Taiwan has a market-oriented health care delivery system, reflecting its free-enterprise economy, as evidenced by the pluralistic organization of health services. Hospital ownership is mixed where public hospitals only account for 35% of all beds. Sixty-three percent of allopathic physicians are salaried employees of hospitals; the remainder, fee-for-service private practitioners. Over the years, hospitals have developed large outpatient departments and affiliated clinics for primary care in order to maintain inpatient volume and compete with private practitioners who operate free-standing clinics with beds. There is no gate keeping mechanism and the insured essentially enjoy complete freedom of choice which is likely a source of overuse.

NHI revenue mainly relies on payroll-based premiums, supplemented by a levy on non-payroll income and government subsidies. In 2013, NHI spent roughly NTD 492 (USD 16.4) billion on medical claims, accounting for approximately 52% of national health expenditures, and in total, Taiwan devoted 6.6% of GDP to health.  As a single payer, NHIA has effectively exploited its market power to experiment with various payment reforms in its 20-year history.  NHIA gradually set up separate global budgets for dental services, Chinese medicines, primary care services, and hospital services since 1998.  The annual growth rate of the total NHI budget is negotiated among stakeholders. 

The seminar looks to the future with presentations on innovative healthcare delivery models and coping strategies by private hospitals.

Transcript