Health Care Statistics
Population, total
World Health Statistics
Life expectancy at birth, total (years)
Mortality rate, infant (per 1,000 live births)
Hospital beds (per 1,000 people)
Country Profile
Beginning in the 1950s, public health insurance programs were set up in Taiwan to minimize individual risk. Prior to 1995 Taiwan had a number of different public insurance schemes, each covering a particular subset of the population usually related to employment: Labor Insurance, Government Employee Insurance, and Farmers Insurance.
Beginning in the 1950s, public health insurance programs were set up in Taiwan to minimize individual risk. Prior to 1995 Taiwan had a number of different public insurance schemes, each covering a particular subset of the population usually related to employment: Labor Insurance, Government Employee Insurance, and Farmers Insurance. In February 1995 there were about 10 such programs, but only about 57% of Taiwan’s people were insured through these different programs, leaving about 8.62 million people uninsured, a majority of whom were children under age 14 or adults older than 65. The uninsured were deterred from seeking necessary medical services, and this created unequal access to health care between socioeconomic classes.
In the 1980s Taiwan experienced the beginning of rapid economic growth that increased the demand for better health insurance coverage. In 1987 Taiwan abolished the martial law that had been in force since the KMT’s (Nationalist Party’s) retreat from Mainland China in 1949, paving the way for Taiwan’s transition to democracy. This had the unintended consequence of strengthening the KMT’s opposition party, the Democratic Progressive Party (DPP), which had historically advocated the establishment of universal national health insurance. As a response to increasing political pressure from DPP, in 1987 the KMT set up a planning commission with the Council for Economic Planning and Development to study other health care systems. The commission took a broad international approach, and focused on the most effective and applicable aspects of health insurance and health care systems around the world. The years of planning culminated in the National Health Insurance model in 1995, the process of which has been described as creating “a car that has been domestically designed and produced, but with many components imported from over ten other countries.”
Taiwan
Historical Context
Beginning in the 1950s, public health insurance programs were set up in Taiwan to minimize individual risk. Prior to 1995 Taiwan had a number of different public insurance schemes, each covering a particular subset of the population usually related to employment: Labor Insurance, Government Employee Insurance, and Farmers Insurance. In February 1995 there were about 10 such programs, but only about 57% of Taiwan’s people were insured through these different programs, leaving about 8.62 million people uninsured, a majority of whom were children under age 14 or adults older than 65. The uninsured were deterred from seeking necessary medical services, and this created unequal access to health care between socioeconomic classes.
In the 1980s Taiwan experienced the beginning of rapid economic growth that increased the demand for better health insurance coverage. In 1987 Taiwan abolished the martial law that had been in force since the KMT’s (Nationalist Party’s) retreat from Mainland China in 1949, paving the way for Taiwan’s transition to democracy. This had the unintended consequence of strengthening the KMT’s opposition party, the Democratic Progressive Party (DPP), which had historically advocated the establishment of universal national health insurance. As a response to increasing political pressure from DPP, in 1987 the KMT set up a planning commission with the Council for Economic Planning and Development to study other health care systems. The commission took a broad international approach, and focused on the most effective and applicable aspects of health insurance and health care systems around the world. The years of planning culminated in the National Health Insurance model in 1995, the process of which has been described as creating “a car that has been domestically designed and produced, but with many components imported from over ten other countries.”
The current health care system in Taiwan is the National Health Insurance (NHI) system. NHI was submitted to Parliament by President Lee Teng-Hui. Under pressure from upcoming elections, President Lee promptly established the Bureau of National Health Insurance (BNHI) and began operations of NHI in 1995.
The current health care system in Taiwan is the National Health Insurance (NHI) system. NHI was submitted to Parliament by President Lee Teng-Hui. Under pressure from upcoming elections, President Lee promptly established the Bureau of National Health Insurance (BNHI) and began operations of NHI in 1995. NHI was created with three specific purposes: provide equal access to health care for all citizens; ensure quality and efficiency in health care delivery; and control health expenditures within an affordable range. NHI replaced the previous patchwork of separate social health insurance funds with one single-payer, national compulsory social insurance plan that is administered by an agency of the central government’s Department of Health. The Bureau of National Health Insurance (BNHI) funds and operates the NHI under the jurisdiction of the national government’s Department of Health. NHI enrollment is mandatory to ensure adequate risk pooling and the broad-based collection of funds to finance it. As of 2009, more than 97% of the population was enrolled.
The system is financed by a mix of premiums and payroll taxes collected from households and employers with large governmental subsidies from general revenue. Co-payments are required, in the realm of about 10% of the cost of an inpatient visit and 20% for an outpatient visit. Both co-payments and premiums are waived for the very poor and veterans and there are ceilings imposed on co-payments for the general public in order to provide financial risk protection from large medical expenses.
The NHI centralizes the disbursement of health-care funds through a single government-run insurer managed by the BNHI under a global budget with uniform fee schedules. About 99% of all claims are processed electronically, which aids in keeping the administrative burden down to about 2% of the NHI’s total budget. As a single payer entity, the BNHI exercises considerable monopsony power over fees, drug prices, and other terms of engagement with providers. The providers operate within a competitive system composed of mixed public and private delivery. This provides patients with the ability to freely choose between providers, and allows hospitals and physicians to choose their practice mode, as about 90% of providers in Taiwan contract with BNHI. In addition, there is no rationing of care, no queues for care, and no referral system, which in combination create a great deal of freedom of choice for users.
A uniform comprehensive benefit package is offered by the NHI that covers some preventative medical services (pediatric immunizations, adult health exams, prenatal care, etc), prescription drugs, dental service, Chinese medicine, home nurse visits, inpatient care, and ambulatory care, among others. More expensive treatments, such as medication for HIV/AIDS and organ transplants are also covered.
NHI exists alongside a very small private health insurance system, which provides specialized and “gold-plated” health insurance plans that are generally targeted at the wealthy.
Taiwan
Summary of Reforms
The current health care system in Taiwan is the National Health Insurance (NHI) system. NHI was submitted to Parliament by President Lee Teng-Hui. Under pressure from upcoming elections, President Lee promptly established the Bureau of National Health Insurance (BNHI) and began operations of NHI in 1995. NHI was created with three specific purposes: provide equal access to health care for all citizens; ensure quality and efficiency in health care delivery; and control health expenditures within an affordable range. NHI replaced the previous patchwork of separate social health insurance funds with one single-payer, national compulsory social insurance plan that is administered by an agency of the central government’s Department of Health. The Bureau of National Health Insurance (BNHI) funds and operates the NHI under the jurisdiction of the national government’s Department of Health. NHI enrollment is mandatory to ensure adequate risk pooling and the broad-based collection of funds to finance it. As of 2009, more than 97% of the population was enrolled.
The system is financed by a mix of premiums and payroll taxes collected from households and employers with large governmental subsidies from general revenue. Co-payments are required, in the realm of about 10% of the cost of an inpatient visit and 20% for an outpatient visit. Both co-payments and premiums are waived for the very poor and veterans and there are ceilings imposed on co-payments for the general public in order to provide financial risk protection from large medical expenses.
The NHI centralizes the disbursement of health-care funds through a single government-run insurer managed by the BNHI under a global budget with uniform fee schedules. About 99% of all claims are processed electronically, which aids in keeping the administrative burden down to about 2% of the NHI’s total budget. As a single payer entity, the BNHI exercises considerable monopsony power over fees, drug prices, and other terms of engagement with providers. The providers operate within a competitive system composed of mixed public and private delivery. This provides patients with the ability to freely choose between providers, and allows hospitals and physicians to choose their practice mode, as about 90% of providers in Taiwan contract with BNHI. In addition, there is no rationing of care, no queues for care, and no referral system, which in combination create a great deal of freedom of choice for users.
A uniform comprehensive benefit package is offered by the NHI that covers some preventative medical services (pediatric immunizations, adult health exams, prenatal care, etc), prescription drugs, dental service, Chinese medicine, home nurse visits, inpatient care, and ambulatory care, among others. More expensive treatments, such as medication for HIV/AIDS and organ transplants are also covered.
NHI exists alongside a very small private health insurance system, which provides specialized and “gold-plated” health insurance plans that are generally targeted at the wealthy.
Taiwan has effectively achieved nearly equal financial access to health care; however, this does not necessarily mean equal physical access to healthcare. Taiwan has low-income neighborhoods, and a small percentage of the population (about 1.64%) lives on remote islands and in mountainous regions. Health services are poorly distributed in these regions, blocking physical access to many individuals in poor or remote locations.
Taiwan has effectively achieved nearly equal financial access to health care; however, this does not necessarily mean equal physical access to healthcare. Taiwan has low-income neighborhoods, and a small percentage of the population (about 1.64%) lives on remote islands and in mountainous regions. Health services are poorly distributed in these regions, blocking physical access to many individuals in poor or remote locations. The Bureau of National Health Insurance (BNHI) has taken action to ameliorate this by introducing incentives for providers to practice in remote areas.
There is little governmental or professional self-regulation within the National Health Insurance System. Recent reports indicate that the low administrative costs of the system show that not enough research and development is being done. This puts quality into question. The Department of Health found in 2002 that that low-cost health insurance has resulted in “‘fast-food health care,” that has negatively impacted the quality of care.
The system is also underfunded and overused. There are a number of concerns with the financing of the NHI, and the system has been in deficit since 2007. Some local governments have consistently failed to remit the BNHI the share of premiums they owed resulting in a cumulative debt owed the BNHI. Only 68.09% of local governments pay on time, leading BNHI to negotiate with governments for payment of their debts. NHI also suffers from false reimbursement claims, in which providers bill for more expensive procedures than the actual service performed.
Taiwan
The Way Forward
Taiwan has effectively achieved nearly equal financial access to health care; however, this does not necessarily mean equal physical access to healthcare. Taiwan has low-income neighborhoods, and a small percentage of the population (about 1.64%) lives on remote islands and in mountainous regions. Health services are poorly distributed in these regions, blocking physical access to many individuals in poor or remote locations. The Bureau of National Health Insurance (BNHI) has taken action to ameliorate this by introducing incentives for providers to practice in remote areas.
There is little governmental or professional self-regulation within the National Health Insurance System. Recent reports indicate that the low administrative costs of the system show that not enough research and development is being done. This puts quality into question. The Department of Health found in 2002 that that low-cost health insurance has resulted in “‘fast-food health care,” that has negatively impacted the quality of care.
The system is also underfunded and overused. There are a number of concerns with the financing of the NHI, and the system has been in deficit since 2007. Some local governments have consistently failed to remit the BNHI the share of premiums they owed resulting in a cumulative debt owed the BNHI. Only 68.09% of local governments pay on time, leading BNHI to negotiate with governments for payment of their debts. NHI also suffers from false reimbursement claims, in which providers bill for more expensive procedures than the actual service performed.