NHI framework and financing

After the introduction, the second part of this lecture is the “National Health Insurance framework and financing.” This slide shows how the National Health Insurance program was framed. Every Taiwanese citizen has a NHI IC card (integrated a very small card), which is used to identify the person, store a brief medical history and to bill the national insurer. The patient has to bring his NHI IC card each time when he or she has a medical visit. The hospitals will then claims the related charges from the government. for under government the crimes process for healthcare providers is very rapid in contrast to the rather lengthy processes for payment section seen in the USA or in the UK.

Hence, there is a clear link between activity and payment. In Taiwan, the GPs earn their income mainly through patient consultations, drug prescription, and minor procedures. Sometimes, the GPs provide additional services such as cosmetic laser treatment, aesthetic surgery or detailed health checkup. Self-paid advanced health checkups relatively prevalent in Taiwan, reflecting the general concerns that people have about their own health. There are areas not covered by the NHI and are paid out-of-pocket by patient. It comes to the NHI program financing. National health insurance is primary financed by premiums including general and supplementary premiums. General premiums are calculated on monthly salary and are contributed by the employer, employee, and the government. Supplementary premiums are imposed on certain non-payroll incomes.

Meanwhile, the premium rate is set on the actual basis by the NHI administration and deliberated by the NHI supervise board. The board is also responsible for reviewing critical initiatives such as the scope of benefits and the annual NHI medical expenditure and its allocations. The NHI program operates on a PAY-AS-YOU-GO basis to ensure the financial soundness. As we learned that the premiums comes from employer, employee, and the government. The insured are classified into 6 categories and subject to different premium calculation basis and contribution share depends on the category they belong to. Most salaried employees belong to category one.

They have to pay 30 percent of their premiums and the employer pay about 60 percent and the government pay the remaining 10 percent. The government subsidies 100 percent of the premiums for low income household and military persons. Prisoners are also covered under the NHI program and their premiums are payed by the government. So, how was the premiums collected? There are two types of the NHI premiums. Each person excepted those are 100% subsidy by the government shall remit the general premium. In addition to the general premiums, a supplementary premium has also been collected after the second generation NHI began.

The insured will be charged the supplementary premium 1.9 percent on their incomes receiving including large bonuses, professional fees, part-time wages, stock dividends, interest income and rental income. This table shows the contribution shares of each component. This slide talks about the copayment. When visiting medical facility the insured must pay small copayments. The copayment is partially waived if this hospital outpatient visit is arranged by a referral to ensure the people who really need health care. Individual who meets certain conditions are exempt from making copayments. If those who are insured go to the hospital they would be charged coinsurance and the rate varies according to the length of their stay.

However, this co-insurance was capped around 1,125 US dollars per stay for the same diseases in 2016. And, the dollars accumulated in the entire calendar year of 2016 regardless of the diseases. Since the NHI program’s inceptions, the NHI administrations reimbursed healthcare provider based mainly on a fee-for-service payment system then to better control health expenditure. The NHI administrations started the global budget payment system in 1998 and completed the structure in 2002 to further rationalize the reimbursement of health services. A resource-based relative value scale was initiated in 2004 and a Taiwanese version of the DRGs was initiated in 2010. In addition, a capitation was implemented in 2012 on a trial basis. This slide shows the financial status since the program launched.

National Health Insurance premiums are calculated on the basis of regular salary incomes. In the first decade of the 21st century, however, the salary income declines as a percentage of national income leading to premium growth lagging behind the income growth and funding shortfalls. The introduction of the supplementary premiums that which is talk about on incomes other than regular payroll has alleviated the financial problems. After we know the how the NHI framed and financed, then let’s look at the strength and the weakness of the National Health Insurance. The strength of the National Health Insurance includes Good accessibility, comprehensive coverage, short waiting times, low cost, high coverage rate, and nationwide research databank. However, the program reminds to have two weakness.

The weakness including quality of outpatient visits, weak referral system, and financial programs. Due to the good accessibility, the referral system is very weak of National Health Insurance. National Health Insurance programs provides comprehensive benefits that cover inpatient care, outpatient care, drugs, dental services, traditional Chinese medicine, day care for the mentally ill and home nursing care. Expensive services such as the MRI scans, dialysis, and organ transplants are all covered when it is medically necessary. For people who are less fortunate, the government provides several types of the assistance to make sure they have access to medical services. In addition, the policy of full unlocking of NHI cards was implemented in 2016.

This policy is not only removing the fetters imposed on financially disadvantaged people who fear to seek medical care because of the overdue premium payments but also moving the NHI programs toward an entirely new milestone. One of the core values of the Taiwan’s National Health Insurance program is to remove financial barriers in healthcare for people by having the wealthy subsidize the poor and the healthy subsidize the unhealthy. This explains why the National Health Insurance can even cover patients with haemophilia who spent 119 times as much as the average patient. The average utilization rate of the NHI outpatient services and 2015 was about 15 visits per person per year.

Those visits include visits for dental services and traditional Chinese medicine for inpatient care. The average utilization rate was about 14 admissions per 100 person per year. The number outpatient visit is substantially higher than that seen in many developed country but on the positive side this testified to the convenience of visiting a doctor in Taiwan for which there are practically no financial barriers.