Taiwan’s National Health Insurance: The Experience and Reform of

a Single-payer System

11

Yi-Ren Wang, MS, MLDirector, Planning DivisionBureau of National Health Insurance31st, October, 2011

Presenter Disclosures

(1) The following personal financial relationships with commercial interests relevant to this presentation existed during the past 12 months:

Yi-Ren Wang

No relationships to disclose

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Characteristics of the NHI in Taiwan

CoverageCompulsory enrollment for all citizens and legal residents

Administration Single-payer system run by the government

FinancingPayroll-based premium shared by the employee, employer and government

Benefits Comprehensive package, copayment required

Providers 92% of providers contracted with NHI

Payment Uniformed fee schedule under the global budget

PrivilegesPremium and copayment subsidies for the disadvantaged

33

Major Achievements of NHI

Universal coverage

Equitableprotection

Affordable cost

High public satisfaction

Improved health status

44

Population Covered ： 23 .1 million (99.51%)

Universal Coverage

• Mainly people staying abroad

55

Government 34.8%

Enterprise 27.7%

Households 37.5%

I (Lowest

Income)3.0%

II 5.9%

III 7.7%

IV 9.1%

V (Highest

Income)11.8%

I (Lowest Income)

13.7%

II 17.9%

III 20.9%

IV 23.1%

V (Highest Income)

24.5%

Premium ContributionNT$ 4550 Billion

Benefit Received*NT$ 4615 Billion

Benefit / PremiumRatio

4.9 times

3.3 times

2.9 times

2.7 times

2.2 times

66

Average: 2.9 times

Premium Revenues & Benefits Received by Different Income Groups (1996~2009)

Equitable Protection

*There is a deficit of NT$ 65 Billion (1.4%)

Affordable CostAverage Annual Growth Rate of Medical Expenses (1999-2008)

77

Source : OECD Health Data 2010, Department of HealthNote : Japan (1998-2007) , Australia (1998-2007)

Improved Health Status

10 Years Prior to NHI

Standard mortality rate has decreased by 12%

Standard mortality rate has decreased by 12%

Average life expectancy at birth increased 1.0/1.9 (male/female) years

Average life expectancy at birth increased 1.0/1.9 (male/female) years

10 Years After NHI

Standard mortality rate has decreased by 18%

Standard mortality rate has decreased by 18%

Average life expectancy at birth increased 1.9/2.1 (male/female) years

Average life expectancy at birth increased 1.9/2.1 (male/female) years

88

Source: Department of Health, Taiwan

99

High Public Satisfaction(1995~2010)

Deficit observedagain

194.0

241.3 243.6260.5

264.9

285.2

286.1307.6

336.8352.2 361.1

381.9 387.4402.0 403.1

461.2

156.8

222.9237.6

262.0

285.9

284.2

301.8 323.3337.1

352.6367.4 382.2

401.2 415.9434.8

443.2

100

140

180

220

260

300

340

380

420

460

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Premium Revenues

Medical Expendiures

Annual growth rate from 1996 to 2010Medical Expenditure : 5.03

Premium Revenue : 4.73

year

NT$ billion

1010

Challenges1/2

NHI Financial Status

1.Adjust copayment2.Increase other revenue3.Strict review

1.Adjust premium rate2.Adjust copayment 3.Implement Global Budget system

1.Adjust copayment2.Increase other revenue

Adjust premium rate

The Rates of Salary to Total Taxable Income

1111

Challenges2/2

Low High

Income Groups

%

Source: Government Finance Annual Report for 2011, Ministry of Finance, Taiwan

1212

The 2nd Generation of NHI

July 2001

September 2004

May 2006

January 2011

Text 2 Text 3The 2nd Generation NHI  Planning Task Force was formed under the Executive Yuan.

The Department of Health started to draft the NHI Act amendment.

The NHI Act amendment proposal was submitted to the Congress for review.

The NHI Act amendment was passed by the Congress and promulgated by the President.

Financing ReformFinancing Reform

1313

Annual bonuses

Stock dividends

Income from professional

practice

Saving interests

Income from part-time or sideline jobs

Rentals

× 2%

Imposing Supplementary Premium to the Insured

14

Monthly payroll × 4.91%( ？ ) × 30% × (1+ 0~3 dependents)

Employees’ contribution share

Estimated new premium rate

Basic premium

Suppl. premium

Benefit Reform

1515

Decision Making Process for Benefits Coverage

16

Health Technology AssessmentHealth Technology Assessment

4

Health issues

Financial impact on the

insurance

Medical ethics

Cost effectiveness

Public ConsensusPublic Consensus

Representatives of medical providers

+Insurer

+Representatives of payers,

scholars and related agencies

Payment Reform

1717

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Developing Diversified Payment Schemes

RBRVS (1st 2004, 2nd 2011)

1995 1998~2002 2010 20112001

• 7 diseases•Address new P4P projects to achieve a 5% annual growth rate of the enrollees.

• Phasing in Tw-DRGs up to 60% of the inpatient care.

• Initiate 3-year pilot project for 3 different capitation models.

Final Words

Adding non-payroll incomes into the premium base is a breakthrough for Taiwan’s social insurance.

Enlarged payment unit is expected to integrate medical services with preventive medicine to facilitate our ultimate goal of buying “health” rather than “healthcare”.

Reform for NHI is endless.

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