Via Merrill Goozner, CQ has a nice article on Taiwan, who decided, in 1995, to rebuild their whole health care system. They studied about a dozen systems worldwide and eventually settled on a unique version of single payer that preserved a lot of room for electronic infrastructure advances and patient autonomy. The results?The climate now in Taiwan is a marked contrast with its situation before its adoption of a single-payer system of universal coverage in 1995. Only 59 percent of the population had health insurance at the time, and health costs were growing at double-digit rates. Now 99 percent of the Taiwan population is covered and health costs are growing between 4 and 5 percent annually.[...]Taiwan also relies on global budgets to keep costs under control. Payments are based on a point system that measures the level of health care resources being used. The payment rate per point drops if doctors are ordering so many appointments, tests, and procedures that the cap is likely to be exceeded. Points are recalibrated every three months and doctors respond to changes, seeing fewer patients if point values drop, Hou says. But payment rates for critical care are not adjusted based on utilization, he adds.Having just one payer eases uniformity of billing and payment systems unlike a system in which multiple insurers compete for profits. Administrative costs average below two percent of all health spending in Taiwan. In the United States, however, administrative costs gobble up 15 to 30 cents of the health care dollar, analysts say.The single-payer scheme also gives the government strong leverage to set prices. Doctors “are paid much less than in the United States,” Hou says. “The private sector is rather weak. We are good in bargaining.”It's important to put this simply: They cut cost growth. They went from double digits to a modest four or five percent. The system outran GDP growth last year, but by an amount so trivial that it was equal to a bit over a week of the system's operating costs. Indeed, T.R Reid, in his Frontline documentary Sick, has a long portion on Taiwan; the development of their system and how it works. Everyone, for instance, gets a "smartcard," which has to be swiped for them to access care. When the card is read, their medical record pops up, the pipeline opens for the government to reimburse the provider for their care, etc. It's all tremendously impressive, and you can watch the whole segment here. It'll make you feel like crying next time a doctor opens your manila folder and tells you to talk to his billing specialist on the way out. Image used under a Creative Commons license from Matthew Fang.
