Does universal health insurance make health care unaffordable? Lessons from Taiwan

Health Affairs

Volumn 22, Issue 3, 2003, Pages 77-88

  Lu, Jui Fen Rachel ^a   Hsiao, William C ^b  

^a CHANG GUNG UNIVERSITY   (Taiwan)

^b HARVARD SCHOOL OF PUBLIC HEALTH   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; CONSUMER; COST CONTROL; ECONOMICS; EVALUATION; HEALTH CARE; HEALTH CARE COST; HEALTH CARE DELIVERY; HEALTH CARE QUALITY; HEALTH SERVICES RESEARCH; HEALTH SURVEY; HUMAN; INSURANCE; METHODOLOGY; ORGANIZATION AND MANAGEMENT; PUBLIC HEALTH; TAIWAN;

COMPREHENSIVE HEALTH CARE; CONSUMER SATISFACTION; COST CONTROL; HEALTH EXPENDITURES; HEALTH SERVICES ACCESSIBILITY; HEALTH SERVICES RESEARCH; HEALTH STATUS INDICATORS; HUMANS; NATIONAL HEALTH PROGRAMS; PROGRAM EVALUATION; QUALITY OF HEALTH CARE; TAIWAN; UNIVERSAL COVERAGE;

EID: 0038725711     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.22.3.77     Document Type: Review

References (27)

1. Council for Economic Planning and Development, Taiwan Statistical Data Book Republic of China, 2002 (Taipei: CEPD, 2002), 43, Table 3-1.
2. Department of Health, Health and Vital Statistics, Republic of China 2001 (Taipei: DoH, 2001), Table 46.
3. J.W. Peabody et al., "Health System Reform in the Republic of China: Formulating Policy in a Market-based Health System," Journal of the American Medical Association 273, no. 10 (1995): 777-781;
4. and T. Chiang, "Taiwan's 1995 Health Care Reform," Health Policy 39, no. 3 (1997): 225-239.
5. W.C. Hsiao, C.L. Yaung, and J.R. Lu, "Health Care Financing and Delivery in the ROC: Current Conditions and Future Challenges," Industry of Free China (May 1990): 1-19.
6. CEPD, The Report of National Health Insurance Plan (Taipei: CEPD, 1990).
7. The benefit package specified in the Taiwanese National Health Insurance Act lists the types of services not covered by the NHI.
8. Bureau of National Health Insurance, National Health Insurance Annual Statistical Report, 2001 (in Chinese), 2001, www.nhi.gov.tw/01intro/statistic/ s02.htm (12 February 2003).
9. S.H. Cheng and T.L. Chiang, "The Effect of Universal Health Insurance on Health Care Utilization in Taiwan: Results from a Natural Experiment," Journal of the American Medical Association 278, no. 2 (1997): 89-93.
10. J.R. Lu and W.C. Hsiao, "Development of Taiwan's National Health Accounts," Taiwan Economic Review 29, no. 4 (2001): 547-576.
11. Bureau of National Health Insurance, "Measures Actively Taken by BNHI to Promote Accessibility and NHI Service Quality in Remote Islands and Mountain Areas," Press Release, 2 April 2002, www.nhi.gov.tw/07information/ news/data/91/news0402-1.htm (12 February 2003).
12. National Health Research Institute, Task Force on National Health Insurance Assessment, The Equity of Taiwan's National Health Insurance, Technical Report (Taipei: NHRI, February 2001).
13. In 1999 the government, the hospitals, and the medical associations agreed to establish the nonprofit Taiwan Joint Commission on Hospital Accreditation (TJCHA), which regularly accredits hospitals to assure quality of care. Over recent years the TJCHA has gradually modified the indicators for accreditation, which range from hospital staffing ratios (structure aspect) to readmission rate (outcome aspect). The contents and format of medical records are also evaluated. The TJCHA announces that a hospital has passed the accreditation process, but details are not released. In other words, there is no publicly available information regarding quality of care for institutional providers or for individual clinics.
14. The Department of Health conducts regular public polls to assess the public's satisfaction with the NHI. Periodically, these polls will include questions pertaining to waiting time. DoH, Reports on Public Satisfaction, 1996-2000 (Taipei: DoH, 2000).
15. World Health Organization, World Health Report 2000, Health System: Improving Performance (Geneva: WHO, 2000).
16. A. Wagstaff, "Reflections on and Alternatives to WHO's Fairness of Financial Contribution Index," Health Economics (February 2001): 103-115.
17. The authors calculated Taiwan's score using Taiwanese government surveys of income and spending. Scores for other countries came from WHO, World Health Report 2000. The WHO method lacks the precision to make the absolute value of the score to be meaningful. The score can only indicate the changes over time for a country and identify to which quintile a country belongs compared with other countries.
18. R.H. Arnett et al., "Projections of Health Care Spending to 1990," Health Care Financing Review (Spring 1986): 1-36.
19. National health spending data have been compiled by the Taiwan DoH since 1991. Based on OECD methods and DpH statistics, we have identified bias in the national health spending estimates. The major problems stem from omission of household payments for commercial health insurance and lack of an adjustment for the underreporting of out-of-pocket expenses in household surveys. Adopting the OECD method, we have previously reconstructed national health spending data from 1992 to 2000. Data on spending for private insurance came from the reports of commercial insurance companies, and data on out-of-pocket spending were validated and adjusted by comparing government statistics with the survey data. Nonetheless, as with any national health expenditure compilation, they are approximate estimates. See Lu and Hsiao, "Development of Taiwan's National Health Account."
20. We calculated the residual by a formula that included the following factors: changes in input factor prices (wage rate, prices of supplies, and drug prices), proxied by GDP deflator; change in real income, proxied by changes in GDP per capita in real terms; income elasticity of demand for health care; national health expenditures at given points in time; and change in health status, such as aging and epidemics. Income elasticity was set to be 0.8, the value estimated using the OECD data by W.C. Hsiao and W. Yip, "Health System Structures and Their Impacts on Costs: An Econometric Study," Harvard Working Paper (Cambridge, Mass.: Harvard School of Public Health, 2002). The formula is available on request from the authors; send e-mail to Bill Hsiao at hsiao@hsph.harvard.edu.
21. Hsiao et al., "Health Care Financing and Delivery in the ROC."
22. This rate of increase indicates an approximate price elasticity of demand between 0.25 and 0.35 for those who were not insured before the NHI, estimated crudely based on their age- and sex-adjusted utilization rates before the NHI and their utilization rates after being insured. Our estimation did not control for income and other socioeconomic and health status variables.
23. BNHI, Annual Report, 2002 (Taipei: BNHI, 2002).
24. S. Woolhandler and D.U. Himmelstein, "The Deteriorating Administrative Efficiency of the U.S. Health Care System," New England Journal of Medicine (2 May 1991): 1253-1258.
25. Interview with Jen-Chuan Yeh, president and CEO, BNHI (1995-1998), Taiwan, 14 January 2003.
26. In the National Health Insurance Act, the government did not put a schedule of automatic contribution rate increases into the law.
27. A.S. Preker, "The Introduction of Universal Access to Health Care in the OECD: Lessons for Developing Countries," in Achieving Universal Coverage of Health Care, ed. S. Nitagyarumphong and A. Mills (Bangkok: Ministry of Public Health, 1998), 103-124.