In the article “Making the NHI [National Health Insurance] system sustainable” (page 8, Jan. 11), Yang Cheming (楊哲銘) said that “patients’ sense of responsibility for and control over their medical spending are precisely what is missing in this nation’s system,” and that Taiwan should look to the health savings accounts used in Singapore’s Medicare system, in which “when all the money in someone’s account has been spent, they have to pay for any further medical expenses themselves.”
In other words, there should be an upper spending limit in the NHI system.
Utmost caution is required when addressing such a suggestion, as such changes could lead to a collapse of the fundamental components of the NHI system.
The first principle of insurance is financial risk sharing and social insurance is focused on income redistribution. Since the insurance mechanism transfers insurance fees from healthy people to people who are unwell, and because salaries and other income that provide the basis for calculating social insurance fees tend to transfer the fees of high-income earners toward low-income earners, social insurance performs a double function in redistributing income.
However, Singapore’s health savings accounts only allocates funds to individuals, which cannot be used by anyone else. The result is there is no financial risk sharing between people, which means there is no insurance system.
By academic classification, such a system would be called “self-funded.”
Removing financial risk sharing would eliminate social insurance’s double income redistribution function, which would set Taiwan back to the time before 1949 when there was no social insurance at all — society would no longer be focused on the collective, but rather on the individual.
The fact is even the Singaporean government is aware that its health insurance system is flawed. In particular, when the funds in an individual account are insufficient and the individual has to pay using their own funds, the government can no longer guarantee individual incomes. The government therefore allocates more funds to the health savings accounts for which the upper limit spending has been reached, while designing another standard social insurance to cover the risks and make up for the systemic shortcomings.
The final question posed to academics by the Singaporean system has to do with the fact that while the government does nothing, commercial insurance at least provides financial risk sharing and simple income redistribution. That the system the government is treating with such caution performs no financial risk sharing or income redistribution raises the question of what the government is actually doing.
Asking the public to control and make decisions regarding their medical expenses is tantamount to asking them to decide what medical services they want when they are sick. The cost of having the public act as their own doctors puts their health or their life in danger, or requires them to spend a decade reading up on the relevant medical literature.
The solution to the insurmountable cost of taking care of one’s own health is, of course, to choose a method that comes at a lower cost, and that is to let a doctor make medical decisions on one’s behalf. Since a doctor is making the decisions regarding medical procedure and content, the system should stress the doctor’s control of medical expenditure rather than putting the responsibility on the public.
Lee Jwo-leun is an associate professor in the department of senior citizen service management at National Taichung University of Science and Technology.
Translated by Perry Svensson
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