【Media Report】“Taiwan’s National Health Insurance Turns 30—and Falls Ill! Medical Exodus, Life-Saving Becomes a Losing Business: How Did the ‘Pride of Taiwan’ Miscalculate Three Accounts?”

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2025-10-28

Taiwan’s 30-year-old National Health Insurance (NHI) system is now facing a “midlife crisis.” With worsening financial strain, an exodus of medical professionals, and life-saving medicine turning into a “money-losing business,” the core problem is not that there isn’t enough money—but that the system has been miscalculating its accounts.

Former NHI Director-General Lee Po-Chang pointed out that the fundamental illness of Taiwan’s health insurance lies in misallocated resources and structural flaws, summarized in three key imbalances: misplaced expenditures, mispriced reimbursements, and imbalanced responsibilities. Once hailed as the “pride of Taiwan,” the NHI’s sustainability has been gradually eroded.

Although next year’s NHI budget will surpass NT$1 trillion, Taiwan’s medical system remains in distress. Human resources in internal medicine, surgery, obstetrics and gynecology, and critical care are collapsing; the wave of resignations continues to expand with no end in sight. The NHI’s pressure is rapidly spreading to the medical frontlines. What exactly is happening on the ground?

First Miscalculation — Misplaced Expenditures: 70% for Outpatient, 30% for Inpatient Care

According to Lee, the NHI’s total expenditure exceeds NT$800 billion annually, but the spending structure is severely imbalanced—70% goes to outpatient services, while only 30% supports inpatient and critical care that require intensive manpower and technology.

This imbalance is closely tied to the current fee-for-service payment system. To maintain revenue through point-based reimbursement, hospitals increase the number of consultations, prescriptions, and diagnostic tests—because “the more you do, the more you can claim.” As a result, vast resources are poured into revenue-generating but non-life-saving procedures like CT and MRI scans, while genuine life-saving interventions have become financial losses.

Lee cited international data suggesting that a balanced ratio should be 45% outpatient to 55% inpatient, showing how distorted Taiwan’s resource allocation has become. He emphasized the need to adjust reimbursement standards to shift resources back toward inpatient and critical care—only then can the issue of “sweatshop hospitals” begin to improve.

Second Miscalculation — Mispriced Reimbursements: Undervalued Medical Labor

Lee explained that the NHI system has long undervalued the labor of healthcare professionals. The reimbursement points for specialized services were set too low and have not been adjusted for inflation or labor costs, leaving medical workers underpaid despite long hours and high pressure.

“The massive outflow of healthcare workers is no coincidence,” he said. Current payment standards devalue the efforts of medical staff—especially surgeons, critical care specialists, and nurses—causing chronic workforce shortages that ultimately compromise patient safety and quality of care.

He described it as a structure where “the more lives you save, the more you lose.” High-risk and critical care procedures are reimbursed far below actual cost, making “saving lives” a money-losing endeavor.

Lee urged reforms to increase reimbursement points for surgical, critical care, and inpatient services, ensuring fair compensation for medical expertise. Only when resources flow back to truly life-saving care can the system regain a healthy balance. “Otherwise,” he warned, “no matter how much money we add, it will just be misplaced again—and the problems will remain.”

Third Miscalculation — Systemic Imbalance: Responsibility Gap Between the Public and the Medical Sector

Reflecting on his tenure leading NHI reform, Lee admitted that the “user-pays” co-payment policy was never fully implemented due to political constraints—a missed reform opportunity. He said the government has long treated the NHI as a “political virtue project,” making people careless in their use of medical resources.

He emphasized that citizens must be made to bear personal responsibility through co-payment mechanisms. Only when patients pay part of the cost “out of pocket” will they develop real awareness of medical expenses. “Co-payment is essential,” Lee said. “If we rely only on moral persuasion, it will never work.”

He warned that if politicians continue to let people believe “seeing a doctor is free,” the inevitable outcome will be the exploitation of healthcare workers—“and one day, it will explode.” Only by encouraging citizens to share costs and recognize their responsibility can the NHI system remain sustainable.

Behind this long-term systemic imbalance, Lee also highlighted two often-overlooked dangers: radiation overexposure from excessive testing and medical waste from the reckless construction of local hospitals.

Hidden Danger 1 — Overtesting: Radiation Overuse and Health Risks

NHI resources have long been concentrated in easily reimbursable testing procedures such as CT and MRI scans. This not only wastes funding but also exposes patients to unnecessary radiation risks.

Lee noted that Taiwan’s medical community “uses far too much radiation.” People often undergo repeated scans without realizing the long-term DNA damage such exposure can cause.

Citing studies, he said that frontline radiologic technologists have a significantly higher cancer rate than the general population—proof that radiation hazards may take 10–20 years to appear. This kind of defensive medicine exposes patients to invisible risks and represents another cost of the NHI’s systemic imbalance.

Physicians, seeking to avoid malpractice disputes, tend to “do more rather than less,” while patients—detached from cost awareness—request more tests because they’re covered by insurance. The result: double waste of radiation and resources.

Lee recommended adopting international practices: if a test is deemed unnecessary after professional assessment and yields a negative result, the patient should pay out of pocket to uphold the “user-pays” principle and curb excessive testing.

Hidden Danger 2 — Hospital Construction Mania: Resource Dilution and Medical Waste

Lee criticized local governments’ recent trend of blindly building hospitals as a form of regional development or real-estate promotion, which runs counter to medical reform goals and causes severe dilution of resources.

He explained that a hospital requires a steady income stream and patient volume to operate, but NHI budgets have not increased proportionally, and manpower remains scarce. When new hospitals are built without demand, they struggle to survive and are forced to “treat one patient as three” by encouraging repeated visits to sustain revenue.

This, he said, squanders vast medical resources and is unsustainable. Hospital construction decisions should be made by those who truly understand healthcare systems—not for political gain. Otherwise, new hospitals will engage in unhealthy competition just to survive, dragging the entire medical system into a vicious cycle.

Toward Sustainable Health Insurance: Restoring Balance in Resources, Value, and Responsibility

Lee concluded that the true problem of the NHI lies not in insufficient funding but in the miscalculation of resource allocation and institutional design. From spending imbalance and undervalued labor to the lack of user accountability, these misalignments have driven Taiwan’s healthcare system toward chronic overwork, inequity, and inefficiency.

He stressed that for NHI sustainability, reforms must return to core principles:

  • Redirect resources to truly life-saving care,

  • Reward professional medical value fairly, and

  • Rebuild citizens’ sense of responsibility in healthcare use.

Only then can the NHI evolve from quantitative expansion to qualitative sustainability, returning to its founding mission—“sharing risk and safeguarding health.”

 

Original source：https://www.gvm.com.tw/article/125403