"Crafting a New Chapter for Taiwan's Smart Healthcare: Series 1" Discussing the Current State and Challenges of NHI Resources

Taiwan Smart Healthcare New Chapter Series 1

Current Status and Challenges of National Health Insurance Resources

In today's highly digitized and globalized era, the stability and innovation of healthcare systems are more critical than ever. However, Taiwan's National Health Insurance (NHI) system has recently faced multi-faceted dilemmas and challenges, including concerns about resource allocation, the speed of drug reimbursement, demand pressures from a continuously growing elderly population, and discussions on intergenerational equity.

In this context, how to further develop and consolidate the NHI system is not only an economic issue but also a complex problem involving social justice, technological development, and demographic changes. Before discussing the future direction of the NHI system, we must first deeply understand its current predicaments, background, and origins, in order to propose effective countermeasures and recommendations for various challenges.

Subtitle: Four Major Crises Emerge – What Problems Need to Be Solved?

Since its inception, Taiwan's NHI has been widely praised by the international community. However, for many years, it has faced severe tests in terms of resource input and allocation. It has also undergone continuous review, reform, and evolution to cope with the ever-expanding demand for medical care. In response, Shi Chong-liang, Director-General of the National Health Insurance Administration, Ministry of Health and Welfare, has raised four major crises—lagging resource input, slow reimbursement for expensive drugs, the advent of an aging society, and the strengthening of medical digitization. These not only reveal the concrete medical problem of "finite resources; infinite demand" faced by Taiwan's NHI but also reflect a phenomenon commonly faced by most advanced countries worldwide.

When exploring the issue of resource input, we inevitably compare it with other countries. For example, according to data from the World Health Organization (WHO), the United States' National Health Expenditure (NHE) accounts for 17% of its GDP (Gross Domestic Product), while Switzerland and Germany are 12% and 11.5% respectively. In contrast, Taiwan's NHE only accounts for 7% of its GDP, which is a relatively low level globally. This inevitably raises concerns about whether such low input in Taiwan can sustainably support the fairness and accessibility of universal medical care.

At the same time, reimbursement for expensive drugs also reveals inherent tensions within the system. For example, in Sweden and Australia, the rapid approval and reimbursement of new drugs have shown excellent performance in increasing medical efficiency and improving patient treatment outcomes. Taiwan, however, appears relatively conservative. Although it already reimburses for treatments of major diseases including cancer, the pressure remains immense given the development and application of medical technologies (such as cell or gene therapies) and new drugs, with an annual drug expenditure growth rate of approximately 10% compared to only a 4% growth in the total NHI budget.

Taiwan, along with advanced countries worldwide, faces the severe problem of rapid population aging. As the proportion of the population aged 65 and above continuously rises, potentially exceeding 40% by 2040, this demographic shift will undoubtedly have a tremendous impact on NHI resource allocation and fiscal pressure. This implies that Taiwan, facing the challenge of an aging society, should re-evaluate medical resource allocation and system design with innovative thinking.

The tension between resource allocation and input, and societal needs and expectations, has brought the NHI system to a crossroads. This prompts us to engage in a comprehensive and in-depth discussion and to seek strategies and methods that can ensure the fair, sustainable, and efficient operation of the NHI system.

In fact, most countries face similar challenges in the management and allocation of NHI resources, such as aging populations, rising medical costs, and how to provide high-quality medical services with limited resources. They have developed different and diverse strategies and approaches to address these issues.

1. UK optimizes healthcare resource allocation: The UK's National Health Service (NHS) employs a complex resource allocation system that attempts to ensure resources are distributed according to regional health needs and service costs. It uses data analysis to determine resource allocation ratios for different regions and establishes dedicated funds to address health inequalities.

2. US adopts co-existence of private and government health insurance: The US healthcare system includes diverse payers, with both government-provided health insurance, such as Medicare and Medicaid, and private insurance companies. Government resources focus on supporting the elderly and vulnerable groups, while private insurance offers individuals more choices and flexibility.

3. Germany implements a dual-system health insurance: Germany's health insurance system covers both public and private insurance. Most citizens obtain public health insurance through their employment, while private insurance offers more personalized, value-added options. Additionally, Germany emphasizes the promotion of preventive medicine to reduce future healthcare expenditures.

4. France mobilizes resources and invests in health technology: France's healthcare system strives to ensure efficient use of resources by optimizing patient referral processes and promoting the use of electronic health records to improve resource utilization efficiency. It also actively invests in health technologies such as telemedicine and data analytics to reduce costs and improve service quality.

5. Singapore focuses on preventive healthcare: Singapore's healthcare system emphasizes the shared responsibility of individuals and the government. Through systems like Medisave, everyone is required to save for their future medical expenses. The government also invests resources in preventive medicine and health education to reduce long-term medical burdens.

Each country exhibits different focuses and strategies in the management and allocation of NHI resources. From investing in preventive medicine and utilizing technology to establishing resource allocation models, each strategy demonstrates how that country balances and makes choices when facing limited resources.

Compared to other countries, Taiwan has the advantage of greater digitization and widespread medical access. By upgrading NHI digital AI technology, Taiwan can successfully extend NHI from medical care to preventive health, from allied healthcare services to home-based remote services, and develop precise capitation payments, thus gradually reforming the system.