Taiwan for a Day

When the famous New York Times columnist Thomas Friedman wrote his recent 2008 book Hot, Flat, and Crowded and spoke out loudly in frustration that he wishes America can be China for a day so that Green Revolution can be realized. I wonder if he had paid attention to health care, another critical issue to American’s long term future, would he have declared “Let us be Taiwan for a Day”?

Health care reform is on top of the heap right now for White House and the Congress, first time in 16 years since the failed Clinton attempt. After years of avoidance and run-away financial burden, there is now a sense of urgency by the public especially as the current recession and unemployment situation brought the attention of the devastation of loss of health care coverage. While everyone agrees that an overhaul is needed now, it is highly questionable that a fundamental and effective solution would be found this time given the historical baggage and the way the political system works.

The latest news from Washington D.C. is not encouraging. The hope of getting a good bill passed through the Senate Committees or House Committees before their recess in July seems in doubt as there appear to be no consensus among the legislators and interested parties. Worse, the head wind of the concern for increased federal budget deficit is getting stronger. It is possible that significant political compromise in coverage or budget will have to be made such that the odds of having a once-and-for-all successful fix of the health care system is diminishing. Will we be witnessing the country be dragged down by the exploding cost of the health care as we argue endlessly with each other on how to fix the problem?

The most talked-about success story of health care system reform is what took place in Taiwan back in 1995 that borrowed a lot of ideas from the American Medicare system. What is the chance that we can find a solution that will do as well or close to it? Can America reinvent itself?

Taiwan’s universal health care began the efforts of re-architecting its health care system in 1980’s after its economy and wealth have undergone two decades of rapid growth. Research and planning efforts went into high gear in 1993 (the year Clinton launched his), partly in response to the competing policy campaign by the newly formed opposition party. In less than 2 years, the National Health Insurance (NHI) program was established and rushed into service in 1995 with a few bumps that covers now practically the whole 23+ million populations including guest workers.

What is so great about Taiwan’s health care system that earned the envy and praise by so many public health professionals, economists, and political figures alike worldwide? Beyond the complete care from preventative through dental, drugs to home care, ease of access to and choice of providers got to top the list from patients’ perspective. Indeed, anyone in Taiwan can walk into any of the private or public clinics and hospitals at any time (yes, some open in weekend and evenings) to see any doctor or specialists of his/her choice. No, there is no pre-authorization or referral required with minor but reasonable exceptions. Yes, if you want to see a popular doctor, you would likely need to make a reservation in advance - a result of supply and demand. Further, out of pocket co-pay is about $2 - $5 U.S. dollars per visit that is roughly the cost of having a simple but decent lunch there. Similarly there is a small amount of capped co-pay for prescription drugs.

The possibility of “doctor-shopping” and walk-in service was enabled with a smart-card that every participants gets that allows providers access patients’ basic data and health record as well performing updates and billing electronically through the single payer – the Bureau of National Health Insurance who administers and monitors the health of the system. The administrative cost is so low (less than 2%!) that makes you wonder how could it be good when we are paying a 20% overhead for such a function in U.S.. Is that the price for having a free market and private insurance companies? What values do these health insurance companies add? Why do we need so many middlemen? As Harvard Professor Michael Porter pointed out, one of the major problems with our health care system is that it has the wrong form of competition; a zero-sum as opposed to value-based competition which seems what Taiwan has found.

The bottom line is that for all the benefits, Taiwan’s NHI comes at a total price tag of ~6% of Taiwan’s GDP, compared to ~16% in U.S (or $1K vs. $7K per capita per year). Granted it is currently underfunded, some studies suggest an increase to 8% of GDP would keep it financially sound. By the way, NHI is funded by three parties, roughly around 1/3 each in increasing order: Government (~27%), employer’s contribution (similar to the Social Security Tax system in U.S.), participants (for those who are not employed, he/she is required to participate in the system with a premium of ~20 U.S. dollars per month. If that is not affordable, government will supplement it or pay for it completely). Isn’t it nice that if one does not need to worry about losing their health care if he/she is not employed or lost their jobs?

Of course, no system is perfect, and Taiwan’s NHI does have rooms for improvements that require cost tradeoffs. Of course, I know that the first objection to it for U.S. is the fact that it is a “single payer system”. Many politicians and business men have successfully scare us about involving government in “heath care business” and labeled it with “socialized medicine” and “rationing”. But people are not machines and health care insurance is not like auto insurance or any other business. We do have social responsibility for it to our children, their children, and fellow citizens! What is wrong with a “socialized medicine” if it can be made available effectively to all while delivered by private providers that compete in open markets and freely chosen by patients? Do we rather spiral down into bankruptcy and suffer in quality of life than enjoy an anxiety-free health care system at a lower cost? Do we rather have an inefficient system that does not encourage productive use of resources and real competition just for the namesake?

Before I go, I’d like to leave you the Hippocratic Oath that laid the fundamental principle of the health care 2500 years ago. A modern version of it widely used by many medical schools in U.S. is included below. It is my opinion that any part of a health care system that does not subscribe to or support this oath has no place in it. To me, this is the obvious place to start in any health care system reform. Talk to you soon!

A Modern Version of Hippocratic Oath
I swear to fulfill, to the best of my ability and judgment, this covenant:
I will respect the hard-won scientific gains of those physicians in whose steps I walk, and gladly share such knowledge as is mine with those who are to follow.
I will apply, for the benefit of the sick, all measures [that] are required, avoiding those twin traps of overtreatment and therapeutic nihilism.
I will remember that there is art to medicine as well as science, and that warmth, sympathy, and understanding may outweigh the surgeon's knife or the chemist's drug.
I will not be ashamed to say "I know not," nor will I fail to call in my colleagues when the skills of another are needed for a patient's recovery.
I will respect the privacy of my patients, for their problems are not disclosed to me that the world may know. Most especially must I tread with care in matters of life and death. If it is given me to save a life, all thanks. But it may also be within my power to take a life; this awesome responsibility must be faced with great humbleness and awareness of my own frailty. Above all, I must not play at God.
I will remember that I do not treat a fever chart, a cancerous growth, but a sick human being, whose illness may affect the person's family and economic stability. My responsibility includes these related problems, if I am to care adequately for the sick.
I will prevent disease whenever I can, for prevention is preferable to cure.
I will remember that I remain a member of society, with special obligations to all my fellow human beings, those sound of mind and body as well as the infirm.
If I do not violate this oath, may I enjoy life and art, respected while I live and remembered with affection thereafter. May I always act so as to preserve the finest traditions of my calling and may I long experience the joy of healing those who seek my help.