Unbiased Analysis of Today's Healthcare Issues

Taiwan’s National Health Insurance System: Part II

Written By: Jason Shafrin - Oct• 03•11

A recent Health Economics article by Hsiou and Pylypchuk (2011) examines differences in preventive care and hospitalization use between the United States and Taiwan.  The authors find the following:

The rate of preventive care use is much higher in the USA than in Taiwan, whereas the use of hospital and emergency care is about the same. Results of our decomposition analysis suggest that higher levels of education and income, along with inferior health status in the USA, are significant factors, each explaining between 7% and 15% of the gap in preventive care use.

Today I review some additional information about the Taiwanese health care system.  This information adds to my earlier review.

  • Healthcare System.  Taiwan launched the National Health Insurance (NHI) program in 1995.
  • % Uninsured.  Taiwan’s NHI covers about 98% of the population (compared with only 59% who had coverage prior to 1995)
  • Benefits. NHI covers inpatient care, outpatient care, laboratory tests, pharmaceuticals, dental services, TCM, day care for the mentally ill, and nursing home care. Expensive medical services, such as magnetic resonance imaging scans and organ transplantation, are covered as well.
  • Physician Supply. There are 1.4 physicians for every 1,000 persons in Taiwan (versus 2.3 in the USA, 2.1 in Canada, and 2.2 in the UK)
  • Waiting Times. Hsiou and Pylypchuk (2011) claim that “Taiwanese patients can readily choose their providers without experiencing the long waiting lines that exist in the Canadian and UK systems.”
  • Administrative Costs. 2%.
  • Spending. 6.3% of GDP (vs. 16% in the U.S., 10% in the U.K. and Canada)
  • Funding. The cost of care is primarily financed through premiums, which are calculated based on individuals’ salaries and supplemented with out‐of‐pocket payments and direct government funding.
  • Provider Payments.  Fee‐for‐service payment under global budgeting (which in practice operates as a prospective payment system)
  • Cost Sharing. 10% for hospital stay hospitalization.  Copayments for pharmaceuticals and physician visits (usually under $10 for primary care visit)
  • Physician VisitsHsiou and Pylypchuk (2011) state that “primary care physicians are allotted only a few minutes to spend with patients and lack incentives to provide sufficient preventive care.”

Source: Hsiou, T. R. and Pylypchuk, Y. (2011), Comparing and decomposing differences in preventive and hospital care: USA versus Taiwan. Health Economics. doi: 10.1002/hec.1743


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