Health Care in Taiwan: Why Can’t the United States Learn Some Lessons?

Some years ago in New York I went to hear the Taiwanese health minister describe the country’s new National Health Service. He had just been to visit George W. Bush’s first secretary of health, Tommy Thompson. I could not resist and asked, “While you were in Washington, did you explain to the Republican secretary of health that you’ve introduced a socialized health system?” He looked me squarely in the eyes and said, “You know, it completely slipped my mind!” And well it might. We have heard much tendentious information about the alleged success of Chile’s privatization of social security, but little of the unchallenged efficacy of Taiwan’s health service.

Taiwan inaugurated its National Health Insurance program in 1995. Before then the three major social health insurance programs, Labor Insurance, Government Employee Insurance, and Farmers Insurance, left 40 percent of the population uncovered, many of them children and retirees. Dr. Michael Chen, vice president and chief financial officer of the NHI Bureau, says that there is now 99 percent coverage—he is not sure who the missing 1 percent are, but suspects that they are expatriates who have not registered (apparently, prison inmates are not covered but do receive care in the prison system). Indeed, many expatriates maintain their coverage—including the million or so who now work in mainland China. Conversely, foreign workers in Taiwan are also covered.

NHI premiums cover Western- and Chinese-style medicine, both in- and outpatient, prescription charges, home care, and dentistry. Almost all western-style hospitals and 88 percent of Chinese-medicine clinics are in the system. Though dentists have been opting out of the British National Health dental system in large numbers, almost 95 percent of dental clinics are in the Taiwanese system. Health care is provided by a competitive mixture of municipal and public (about one-third of the beds) and privately owned hospitals that also offer comprehensive primary care. Between them they employ almost two-thirds of doctors. Avoiding the severe conflict of interest that the British system has maintained, doctors contracted to hospitals cannot run private practices on the side.

Taiwan is a smaller (twenty-one million people), more compact country than the United States, but the NHI provides many pointers for Americans attempting to secure full health coverage. To begin with, Taiwan had a vigorous market-based health provision system, which has adapted itself, apparently very happily, to the new national service. The former Kuomintang government was an authoritarian social democracy, in the very limited sense that social provision was on the agenda. But corruption and capitalism were fully developed. The NHI was introduced in the early days of democracy, just as the KMT single-party system was being dismantled. It was a popular election issue.

The provision of health care is not nationalized...