Monday, October 08, 2007

Taiwan gets healthy: full text

Taiwan gets healthy

America should look to Taiwan as a model on healthcare. After all, Taiwan based its successful new system on US Medicare.
Ian Williams

October 7, 2007 7:00 PM | Printable version

The judgment of Herod was a little less subtle than Solomon's. It involved killing all the kids in the hope he could get one. True believer George Bush certainly emulated Herod's single-mindedness rather than Solomonic judgment when he vetoed the bill to provide healthcare for millions American children currently without it.

The president thought that the "moral hazard" that some kids currently insured with private companies might take advantage of in the new scheme was too much for his sensitive soul - so best let the other millions rot.

He is not alone of course. Rudy Giuliani is trying to don the conservative crusader's anti-red cross with attacks on "socialised medicine," which apparently means any rational scheme that would ensure Americans access to the healthcare that every other industrialized country takes for granted.

And yet, in 1995, Taiwan, beloved of conservatives like John Bolton, introduced a single-payer healthcare system that delivers universal coverage with free choice of doctors and hospitals and no waiting lists.

When the Taiwanese set up the system more than 40% of the population was uninsured. They are now covered by the national health insurance scheme - and because of the increased efficiency of the single-payer system - this was done at little or no extra cost.

Giuliani notwithstanding, Taiwan's "socialised medicine" involves no more compulsion than the US social security system. It is a compulsory, mostly premium-financed insurance system, which negotiates a single payment schedule with the municipal- or government-owned providers and the 70% or so of private hospitals and clinics.

Taiwanese do not have to worry that changing or losing their jobs will lose them their healthcare. They do not have to make choices between paying the food bills and getting essential prescriptions. Their doctors will not drop their insurance coverage, nor do they get post-operative sticker shock when they discover the anesthetist the hospital booked
does not accept their insurance. They do not have to worry about big bills for out-of-network providers - because if a doctor is out of the network the chances are they were thrown out for fraud or malpractice.

No wonder Taiwan had time and attention to spare to develop the iPhone while the US was developing sub-prime mortgages.

The doctors like it as well. They are assured payment without wrestling with cost-cutting HMO bureaucrats who get bonuses and promotions based on how many treatment courses they can deny.

There are no prohibitions on doctors operating outside the Taiwanese system - but no one in his right mind will go to one when they can go to any in-system provider and, for nominal (try $1.50!) co-payments, simply have their insurance card scanned, confident that the NHI will settle the bill with none of the hassle that Americans have
come to know and hate from HMO's and multiple billings from different practitioners.

Most astoundingly, for any capitalist with an accountant, is the difference in costs and efficiency. Taiwan gives everyone healthcare for less than one sixth the price per head of the US. In fact by 2005, US healthcare amounted to almost $2 trillion, or $6,697 per person, amounting to 16% of GDP - and still left 47 million people without insurance, more than 20 million inadequately covered, and, as GM's recent manoeuvres show, untold millions more whose insurance is not as secure as they once thought. Taiwan spent 5.7% of GDP and less than $900 a head.

The Taiwanese service offers in- and out-patient care, house calls, physiotherapy, Chinese medicine, and even dentistry - all for premiums that in New York would not get dental coverage alone. If this is socialised medicine, then Americans really need it, no matter how much the health insurance companies are paying into the campaigns of Rudy and Hillary.

In 2005, polls showed that 72.5% of Taiwanese are happy with the system - and when they are unhappy, it's with the cost of premiums, laughably small though they are by American standards: less than $20 a month. In contrast, last year I paid more than $1,500 a month for a family of three in New York.

The greatest irony of this is that the model that the Taiwanese chose was American -Medicare, the pubic system in the states that serves the elderly and was created by Lyndon Johnson and a heavily Democratic congress in 1965. Premium collection is similar to that of social security contributions in the US. Employers and the self-employed are legally bound to pay. However, unlike the US social security fund, the NHI is a genuine pay-as-you-go system. The aim is for the premium income to pay costs, but there is also a tobacco tax surcharge that goes to the NHI, and contributions from the national lottery. Cigarettes in Taiwan are ridiculously cheap, which is why no one has blinked at the proposal to double the surcharge.

To implement a similar system in the US makes eminent sense and is certainly financially and organisationally possible, indeed relatively easy. At the present juncture an American single-payer system is even politically feasible, although it would involve taking on some big lobbies - notably the health insurers on whose altars Bush is prepared to sacrifice nine million kids.

Things have changed since Hillary Clinton's Rube Goldberg attempts to keep the insurers at the fundraising dinners. The spread of HMO's has devalued medical insurance. How many doctors will hang themselves from their stethoscopes to keep the present nightmarish bureaucracy of unqualified cost cutters?

Among the political obstacles to a sane emulation of the Taiwanese system, the tobacco lobby could be disarmed - it could almost present smoking as virtuous if it helped finance universal healthcare.

Is it really too much to think that the $250bn global tobacco settlement could be allocated to a health insurance scheme instead of, in effect, providing walking round money for the governors of the states?

Of course the pharmaceutical industry would scream, since one of the major points of cost control for the Taiwanese system is that NHI is a monopoly purchaser and so has greater bargaining power with the drug companies and with the providers. So if the GOP is out the picture, who is going to stand up in public for higher prescription costs or higher premiums?

It is not just the 47 million uninsured who can be mobilized. GM's hiving off its healthcare obligations to the auto workers union, soon to be emulated by others, sends a signal that not even the insured are safe. Universal coverage would also give security and peace of mind to millions of other voters whose coverage is threatened by unemployment or benefit rollback from rapacious corporate executives.

On the practical side, much of the machinery is already set up. Among the IRS and the social security for collection and Medicare for payment, with the veterans' administration and Medicaid rolled in, there are already the makings of a lean mean machine that would save billions in administration compared with the health insurers and their voracious demands on providers for paperwork from providers and patients.

It would involve moving into the 21st century. Taiwan has an insurance card with an IC chip that provides essential medical records and collates prescription and treatment data - which is not only better for the patient's health but averts billing fraud.

But that is a small step compared with the move into the second half of the 20th century that universal healthcare in the US would represent. The US is the only industrialized country in the world without a full health service - and if newly industrialized Taiwan can do it, so can Washington.

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