One of the most important challenges Taiwan faces at the moment is improving its healthcare system. This system has three aspects, (1) the National Health Insurance system and the laws that regulate it, (2) the healthcare delivery system, and (3) patients, the people who avail themselves of the system. We must deal with all of them at the same time and we must apply parallel concepts to a restructuring of the system.
We must first ask ourselves a couple of questions about healthcare. The first is "How are we going to treat healthcare? As a simple professional issue, a social welfare program, a political issue or an industry?" Different countries currently treat healthcare in different ways with varying results. What is the best way for Taiwan?
ILLUSTRATION: MOUNTAIN PEOPLE
At present, we have a compulsory National Health Insurance system that covers approximately 96 percent of Taiwan's residents. It works, but not as well as it should.
We could decide to view healthcare 100 percent as a social welfare issue, because almost everyone in Taiwan uses the National Health Insurance system. For a number of reasons that will become clear, I don't think this is the best solution.
The system is much too large to treat as a simple professional issue. Four percent of Taiwan's population are directly employed by and 5.8 percent of its GDP is created by the healthcare delivery system, which includes the professionals who practice in hospitals and companies, who create the equipment and supplies used in medical treatment, who produce and sell medications, and who work in healthcare-related professions such as nutrition. That is larger than Taiwan's agricultural industry on both counts.
If we treat it as a social welfare problem, we might satisfy our moral inclinations to guarantee that everyone in our society gets the medical care they need. But looking only at the social welfare side of healthcare seems to me to ignore the reality of what the healthcare system consists of. One of its major players is the pharmaceutical industry. And who does it play with? Primarily with the other major players in the delivery system: hospitals, clinics, and medical and other healthcare personnel.
In addition, if we do treat the entire healthcare system as a social welfare issue, the vitality of the pharmaceutical industry and other healthcare-related industries will pass away. Without the proper incentives for people in the industry, innovation and development will come to a standstill. This has already happened to a great extent in Taiwan's haphazardly regulated healthcare sector. Moreover, the financial footprint of the healthcare system makes it difficult to argue that it's not an industry.
If we don't treat healthcare as an industry, then it has to be regulated as a social welfare program and given massive government support, a burden that the taxpayers will have to bear. If we do decide to treat healthcare as an industry -- and, specifically, a healthcare delivery industry -- a second important question is: How do we decide who gets what resources? We can leave it all up to the market and its mysterious mechanisms; or we can leave it all up to the government and its regulators; or we can combine these two approaches by looking at healthcare in a different way.
The first thing we must do is recognize that the healthcare system, like all other industries, requires a marketplace in order to thrive. The market encourages those in the system to work more efficiently or be priced out of the market. It encourages innovation and other forms of competition, and we have seen a great deal of that recently.
Our healthcare industry is not as healthy as America's, in part because we have not yet decided how to treat it. And because of this, we have incomplete and piecemeal legislation for healthcare. At the same time, there are too many regulations, too many regulatory agencies and too many special interests. This means that there is too close a relationship between government regulators and special-interest-group lobbyists. We all know what that leads to and it benefits neither the healthcare consumer nor the taxpayer.
As you must be able to tell by now, I do not advocate 100 percent control of healthcare by market mechanisms, because they lack equity and equality. What I do advocate is a mixed mode of control, one that allows the industry players the freedom to compete in a minimally regulated market and that also guarantees healthcare coverage to 100 percent of the people regardless of wealth, income, or social status. The government, I believe, has a moral obligation to see that all its citizens are as healthy as they can be. Without a healthy population, a country cannot be strong and vital.
The next problem is how to achieve such a mixed system. Such a project will require at least three types of restructuring. Here are some of my ideas about how to achieve this in Taiwan.
Restructuring the concepts
Results come from action, and action from ideas. I have been promoting five key concepts that I believe will encourage our citizens to become more involved in the healthcare industry and promote competition and new-found market opportunities that will benefit those who seek and those who provide healthcare in Taiwan. These concepts are:
a) Relaxation of medical regulations;
b) Diversification of healthcare services;
c) Specialization in healthcare administration;
d) Transformation of Department of Health hospitals; and, finally,
e) Industrialization of biomedical technology.
The role of the government, on the other hand, will be to supervise market activities to ensure that the entire system achieves efficiency as well as quality, equity and equality rather than become a player itself. It should operate something like a football game in which the people are the players and the government the referee.
It is hard work to reorganize the government. It is even harder to reshape the healthcare department. Why? Because of the concept. Ever since Kenneth J. Arrow, winner of the 1972 Nobel Prize in Economics, introduced the unique character of healthcare in his 1963 article in the American Economic Review "Uncertainty and the Welfare Economics of Medical Care," how the world's governments should develop their healthcare regimes, what roles they should play, and how they should supervise the healthcare market have been controversial. The industrialized countries, after trying out different models, came to a consensus called a "new universalism," endorsed by the World Health Organization in its 1999 report New Directions for Health in the 21st Century. This "new universalism" -- which emphasizes healthcare coverage for all but not for everything -- urges that healthcare services be financed publicly and provided privately. It stresses that the government is incapable of providing a complete healthcare service, thus it must promote proper market opportunities and competition. This is a trend, and most industrialized countries are working to apply it.
Back to Taiwan. What role the government should play and how to define healthcare service are still controversial. And the argument always turns on the contrast between capitalism and socialism. Political advocates of these two -isms make it even more difficult to have a sensible discussion about this topic because of their political ends. They infuse the issue with divisive emotion. People are still arguing issues such as "Should we diversify the National Health Insurance system?" or "Should we apply the Consumer Protection Law to the medical care industry?"
We in Taiwan are far behind other countries in this respect. Our medical resources are limited, and we have to rejuvenate them by opening up market opportunities to ensure that everyone gets an equal share of what will surely become an expanded pool of resources. In somewhat simplistic political terms, we must use right-wing measures to implement a left-wing idea. This concept corresponds to the world trend. The government's responsibility is to make sure its people get equal and reasonable healthcare but not to decide who benefits financially or how much.
Restructuring the organization
The goal of this restructuring is to build up an efficient and responsible organization. Three problems in our current healthcare administration are:
a) One country, two systems: Taiwan's healthcare system is 60 percent privately and 40 percent government operated;
b) The healthcare delivery system has too many tiers in the same area, which causes it to be inefficient; and
c) Responsibilities overlap in some organizations, another cause of inefficiency.
What we should do now:
? Create an environment that will facilitate the integration of the healthcare delivery system. This will require new legislation to allow market forces to operate.
? Transform the services of Department of Health hospitals, which have long been uncompetitive in the market, by merging, outsourcing, and modifying strategy to promote efficiency.
? Transform some Department of Health hospitals that have low bed-occupancy into long-term care centers compatible with our increasingly elderly population.
? Upgrade the Central healthcare organization to meet the society's needs. The current Department of Health, which was created in 1970, cannot meet the growing demands of Taiwan's contemporary society.
Currently, healthcare and social welfare are under different departments. This explains why some policies, plans, and standards are not incorporated by administrators in both sectors, and why the management of these sectors is inefficient. In addition, our society is rapidly aging and will soon consist of a majority of senior citizens. Nursing homes and long-term care for seniors should be one of the government's priorities. Thus, assigning a single department to integrate healthcare and social welfare is what the society needs right now.
Restructuring the healthcare laws
Conceptual and organizational restructuring requires better healthcare laws if it is to be accomplished. Some healthcare-related laws in this country have not been modified for 30 or 40 years. Not only do they not meet the demands of contemporary society, many of them even prevent change and progress in the system. Though the government passed 22 pieces of healthcare legislation during my term as head of the Department of Health, more legislative revision and appropriate new legislation are required.
a) Amending the laws
The government is too involved in some aspects of healthcare, but in others there is no regulation of activities. For instance, hospitals are not allowed to be incorporated, and only medical doctors may become president of a hospital. This makes inheritance impossible, and it also seriously inhibits fund-raising for hospital expansion. This half-hearted involvement is one of the barriers to medical development in Taiwan.
Two examples of over-regulation are the onerous restrictions establishing new hospitals and issuing licenses to practice medicine. Doctors can work in only one hospital or one clinic. Some of our laws no longer follow world trends. The regulations on medical cooperation and the licensing of Physician's Assistants, for instance, need to be revised to meet the current expectations of our society.
b) Revision of National Health Insurance
Ever since National Health Insurance was implemented in March 1995, most people in Taiwan have received adequate medical care. Though the medical community and medical organizations have consistently criticized the National Health Insurance program, 75 percent of our citizens are satisfied with it. This is because in the initial stage, the program's funding was sufficient. Now, with increasing financial pressure, revision of the program is essential if we are to avoid a disaster. If the program is run by only one organization, it is likely to be bureaucratic, retrogressive, or stagnant. And if that one organization is the government, there will be more political manipulation than professional concern for the goals of the system. I strongly recommend that we modify the current system now to prepare for what we know will be our future needs. Time is rapidly running out. This huge program needs to be managed well and not merely administrated.
Conclusion
The World Bank predicted that medical care systems would occupy 9 percent of global resources. The more industrialized the country, the higher the percentage. As Dr. Gro Harlem Brundtland, Director-General of the World Health Organization, said healthcare is not only consumption but also investment, which is key to industry in any country. In order to set up a better healthcare system for the next generation, we should accelerate the restructuring that will allow a good delivery system to provide efficient, good-quality care and a sound insurance program to take care of the program's long-term financial needs.
Chan Chi-Shean (詹啟賢) is a national policy adviser to the president.
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