HUALIEN COUNTY, Taiwan — Thirty years ago, before she dyed her hair pink to cover up the white, Dr. Huei-wen Tien came to Xiulin, a township on the east coast of Taiwan severed from the island’s urban centers by a formidable mountain range.
She had agreed to serve for 10 years in an aboriginal community in exchange for her medical education. Unconventional by nature — her motorcycle helmet says “Punk” — Tien says she wanted a challenge. She found one here, where about 15,000 people, mostly of the Taroko tribe, live near the lush gorges of a national park that shares their name.
Diabetes, alcoholism, and heart disease are common problems among the Taroko. The indigenous people have endured displacement, forced assimilation, and discrimination over the centuries. They are also poorer than the ethnically Han Chinese who make up most of Taiwan’s population.
But they never have to worry about one thing: their health care. In Taiwan, everybody is covered. The Taiwanese health care system is built on the belief that everyone deserves health care, in Xiulin just as much as anywhere else. The costs to patients are minimal. And the government has set up special programs to deliver care to the people in Xiulin and their neighbors in Hualien County.
In the 1990s, Taiwan did what has long been considered impossible in the US: The island of 24 million people took a fractured and inequitable health care system and transformed it into something as close to Sen. Bernie Sanders’s vision of Medicare-for-all as anything in the world.
Taiwan made its choice in the 1990s and embraced single-payer. It has required sacrifice: by doctors who believe they’re forced to see too many patients every day; by patients with complex and costly conditions who can’t always access the latest treatments; by citizens who have been asked from time to time, and will be asked again, to pay more for their health care than they did before.
The vast majority of Taiwan’s citizens today approve of their health care system. They know it isn’t a utopia. The country has made hard choices to keep this program sustainable, and it will need to do so again. That is what it takes to realize the single-payer dream.
The national government would eventually fast-track the implementation of the new system to 1995, hoping to get the chaotic transition period over before the first popular elections in 1996. There was plenty of skepticism leading up to it. Industry, experts, and the public alike doubted the program would succeed. Labor protesters threw paper money traditionally used in a funerary rite when the legislature passed the single-payer bill in 1994. A majority of people in Taiwan disapproved of the single-payer plan when it took effect.
But the program’s reputation quickly improved once people started to enjoy its benefits. Approval has dipped (when premiums were hiked in the 2000s) and risen (when the rural health care program that employs Tien in Xiulin was implemented) over the years, but there has always been a solid baseline of support. Today, approval of the national health insurance program hovers near its all-time high, over 80 percent. The system endures 25 years after it was established.
Part of its appeal is its simplicity. Everybody in Taiwan is insured through the National Health Insurance Administration (NHIA). They receive an ID card as proof of coverage, which also stores their medical records. The Taiwanese program runs with extraordinary efficiency: About 1 percent of its funding is spent on administration, according to a 2015 review by Cheng. (Compare that to the US, where researchers have estimated that private insurers spend around 12 percent of overhead, and hospitals spend around 25 percent on administrative work.) Experts say Taiwan’s advanced IT infrastructure deserves a good share of the credit.
The benefits are quite comprehensive: hospital care, primary care, prescription drugs, traditional Chinese medicine. Patients must make copays when they visit the doctor or fill a prescription or go to the ER, but they are generally low, 360 NTD (about $12) or less. Lower-income patients are given an additional break on their cost-sharing obligations. Higher-income patients can take out private insurance for certain things not covered by the single-payer program.
The system is mostly funded by payroll-based premiums, with contributions from workers and their employers, supplemented by more progressive income taxes and tobacco and lottery levies. Premiums have been raised twice in the past 18 years to cover the growing cost of the program. The most recent rate increase in 2010 moved the payroll income tax rate from 4.55 percent to 5.17, a 14 percent increase.
In the early 2000s, again at Reinhardt’s recommendation, Taiwan converted to global budgets to pay for health care as another cost-control measure. This means that every year, government officials and private providers sit across a table and negotiate rates for services, with an annual cap set on the total payments to hospitals and doctors that the government will make. Health spending has stayed flat in recent years as a percentage of GDP, and it is growing at a slower rate in Taiwan than in the United States.
What it all adds up to is a system that patients seem broadly happy with — maybe too happy, according to doctors and economists I met.
“I believe we are too kind to our patient[s],” says Shou-Hsia Cheng, a health economics professor at National Taiwan University (NTU) who has worked at NHIA on and off over the years, “which is not a good thing, actually.”
Taiwanese people take advantage of their cheap, accessible health care. The average number of physician visits per year (12.1) is nearly twice that of other developed economies. There was a dramatic spike in use after single-payer was passed: A 1997 JAMA research paper led by Shou-Hsia Cheng found that physician visits among the newly insured doubled in the first year of the program compared to the year before.
That has had predictable downsides: Hospitals get crowded in Taiwan. The capacity of health care providers to attend to everyone in need can be stretched pretty thin.
The scenes bring to mind something I heard from trauma surgeon Li-Jian Chien, a member of the Taiwanese doctors union that formed in 2012 out of the frustrations felt in the medical profession.
In Taiwan, he says, “the patient [is] in heaven” — but “the doctor is in hell.”
Chien says national health insurance with negligible cost sharing has pushed doctors to the brink. His friend and fellow physician Bing-Hong Lin exclaimed at one point during our interview: “We are not the Avengers!”
Surveys conducted by the government show health care providers have rather mixed opinions on the single-payer system — a significant plurality, 43 percent, said they were “neutral” in 2018 — a sharp contrast to the public’s sky-high favorability.
Chien says he sometimes sees the same patient dozens of times every year in the emergency department where he works, often for problems that aren’t emergencies. The low costs mean patients have little incentive to avoid the ER.
“Everyone wants to live forever, but it’s impossible,” Chien says. “Some people abuse emergency, abuse health care.”
At the same time, because Taipei has a lot of traffic accidents, injured drivers and pedestrians come through his emergency department’s doors all the time. His attention is divided when it shouldn’t be.
Lin has started doing cosmetic medicine for adults on the side because he has become so frustrated by his pediatric practice. It’s a more lucrative field, paid for privately by patients, with a less demanding workload. His is not an uncommon choice, according to experts. Lin still bitterly remembers being called back early from leave he had taken in 2005 to attend his father’s funeral, because there was a staffing shortage at the hospital where he was doing his residency.
Taiwanese hospitals and clinics are understaffed compared to the rest of the world: There are about 1.7 doctors in Taiwan for every 1,000 patients, which is well below the average of 3.3 in other developed countries. There are especially shortages of specialists in less urbanized parts of the country.
“Taiwan’s low ratios would be considered inadequate by OECD standards,” Tsung-Mei Cheng wrote in 2015, “especially in view of the high utilization of health care services in Taiwan.”
The country does excel at keeping wait times short for services like cataract and hip replacement surgeries. But providers are feeling the strain.
Taiwanese doctors work about 10 more hours a week on average than those in the United States. A 2016 survey of hospital physicians found that working overtime was prevalent, and doctors who worked a lot of overtime were more likely to say they might leave the hospital where they worked.
Crowded facilities, like the NTU Hospital, are the norm. Hospitals supplement their medical payments with high-margin non-health care services — food courts, parking, and so on — to keep themselves solvent.
The worry is that Taiwan’s national health insurance has given patients such a good deal on medical care that they are overwhelming the system.
The patients have their own grievances. They’ve seen their premiums hiked and more taxes introduced over the past two decades, and they will probably be asked again soon to chip in more money.
And though the benefits are comprehensive for most people, Taiwan still doesn’t cover everything. Costly treatments for rare conditions are sometimes excluded.
New medicines sometimes debut in Taiwan a full five years after they came on the market in the United States. For patients who need those medications, every day of waiting is a trial.
“Now the medicine is there,” Li says, “but you cannot use” it.
Even though Taiwanese patients get a good deal on health care, they don’t come across as entitled. Some of the patients I met, including those who have faced the gravest diagnoses, seem acutely aware of the trade-offs demanded of them to keep a single-payer system sustainable.
Gloria Lin was diagnosed with breast cancer shortly before national health insurance took effect; today she is president of the Taiwanese Cancer Patient Association. Her group plays a part in talks between government and providers about what will be covered (and for how much).
She told me that of course she wants to see every new cancer drug covered by the government plan. But she also understands why that’s impossible: The system would become too expensive.
“We don’t want it [to go] bankrupt,” she says. “We have to work hand to hand together to solve the problem. … We have to be sensible for each other.”
One metric tells the tale: a rating based on medically amenable mortality, which gives a sense of how often people die of causes for which medical interventions should be available. In 1990, before Taiwan’s single-payer program was implemented, the country held a rating around 60, far behind the United States’ rating of 80. In 2016, Taiwan had nearly caught up with the US, topping 85; the US sat at 88, trailing its socioeconomic peers in Europe.
Today, Americans die prematurely of heart disease and lung cancer at higher rates than the Taiwanese. People in Taiwan live a little longer in general, though there are populations that encounter early deaths from alcohol use and stroke, just as some disadvantaged groups do in the United States. Yet overall, Taiwan spends 6 percent of its GDP on health care, about a third of what the United States does.
But hard choices still loom.
In the early 2000s, with health spending growing too quickly, the national health insurance office decided to institute the global budgets, a set pool of money that would cover all the medical services in a given year. Hong-Jen Chang, then the NHIA director, remembers seeing his effigy being decapitated in protests by hospital supporters. The opposition was overwhelming, and he had to resign over that decision in 2004. That was also shortly after the first premium increase was approved.
Shou-Hsia Cheng, the NTU professor, predicted Taiwan would soon have to reevaluate its payments for end-of-life care. The country is currently debating how to expand long-term care for an aging population; it’s not covered by the national health plan.
The financial crunch is coming. The NHIA, which ran surpluses for a while after the last round of rate increases, is now about to see its reserves run out.
“Either we should increase the premium rate or increase the copayment, or we have to delete some coverage items,” Chang, the former NHIA director, says. “That will happen — not in two years, perhaps in 10 years. It will happen.”