【Opinion】Health Forum / Li Po-Chang: The Core of National Health Insurance Is Not Finance, but Governance
Health Forum / Li Po-Chang: The Core of National Health Insurance Is Not Finance, but Governance
2026-07-06 00:00 | United Daily News / By Li Po-Chang
Taiwan’s National Health Insurance (NHI) system is a source of national pride, but ensuring its long-term sustainability has always been a formidable challenge. During my nearly seven years as Director-General of the National Health Insurance Administration (NHIA), I repeatedly felt that one fundamental question was consistently avoided: What kinds of medical services should we actually be paying for? If the system continues to reimburse medical interventions with limited marginal benefit—or even those that provide no meaningful benefit to patients—then no matter how much the global budget is increased or how reimbursement point values are adjusted, the healthcare system will never be able to provide healthcare professionals with fair and appropriate compensation.
Correcting Payment Direction Is the Key to Better Resource Allocation
When discussing healthcare systems, we often attribute problems to “excessive demand” or “insufficient resources.” However, after years of observing both Taiwan’s National Health Insurance and private health insurance systems, I gradually realized that what truly shapes medical practice is not demand itself, but payment.
When the payment system fails to clearly distinguish between necessary and unnecessary medical care, it continuously sends ambiguous signals. Over time, clinical decision-making becomes influenced less by professional judgment and increasingly by the incentives embedded within the reimbursement system.
Only when payment signals are properly aligned can professional judgment return to its rightful place, allowing healthcare resources to be directed toward interventions that genuinely matter. If we fail to confront this issue, the healthcare system will eventually lose its direction—even while remaining legally compliant—and gradually be hollowed out from within.
In Taiwan, concerns about whether National Health Insurance will eventually become financially unsustainable have become a recurring public anxiety. However, if discussions about sustainability focus solely on financial statements, we risk overlooking the more fundamental issue: the core challenge of National Health Insurance is not financial arithmetic—it is governance.
Governance is not simply about controlling overall expenditures. Rather, it is about whether the system can identify value, guide behavior, reduce waste, protect necessary medical care, preserve professional integrity, and allocate limited resources where they generate the greatest benefit. A system that manages only spending, but not value, may achieve short-term financial stability while allowing deeper structural imbalances to accumulate over time. What appears to be financial pressure is, in reality, a failure to align payment with value.
Today, National Health Insurance faces not only the pressures of population aging, rapid advances in medical technology, and constrained financial resources, but also another structural issue that receives far less attention: the system continues to reimburse certain medical services without adequately asking whether they truly deliver value. When this question remains unanswered for too long, the consequences extend beyond a diluted global budget—they fundamentally reshape the entire healthcare ecosystem.
Unnecessary Medical Care Continues to Drain the Global Budget
Unnecessary medical care should not be viewed simply as an issue of individual physicians’ ethics, nor should it be reduced to a handful of fraudulent cases. The real challenge is that unnecessary medical care is often neither illegal nor technically incorrect. Instead, it exists in a gray area where it remains consistently reimbursable, tolerated, and reproducible within the system. Such care may fully comply with established procedures while offering little clinical value; it may involve no malicious intent, yet it continues to consume healthcare resources.
We frequently discuss the global budget system and reimbursement point values, patient copayments, healthcare workforce shortages, unnecessary medical care, medical device governance, indemnity-based private health insurance, legal accountability, and smart governance. Although these topics may appear unrelated, they all address the same underlying question: When a healthcare system lacks clear value-based governance, how do payment mechanisms gradually distort medical practice?
In my book, Unnecessary Medical Care That Gets Paid For: The Invisible Drain on Healthcare!!, I present a different perspective. Governing unnecessary medical care is not about identifying bad actors—it is about correcting the direction of the system itself. Does the current system continue to reward low-value healthcare? If the answer is yes, then systemic imbalance will eventually undermine the entire healthcare system.
Conversely, if the payment system is recalibrated so that necessity, transparency, traceability, and the ability to identify risk once again become its core principles, Taiwan’s National Health Insurance can return to a healthier and more sustainable path.
(Author: Li Po-Chang, Chair Professor, College of Public Health, Taipei Medical University; Director, Center for Health and Welfare Policy Research, Taipei Medical University; Former Director-General, National Health Insurance Administration.)
