Health Care IndustryThe most complicated Service Industry

Prof. HongJen Chang, MD, MPH, MSFor Global Health, NTU

2012. 5.11

Unless noted, the course materials are licensed under Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Taiwan (CC BY-NC-SA 3.0)

Outline

Introducing myself Do you know how to ask questions and

read numbers Basic concept of health care –

examples International Criteria of a good health

care system The performance of Taiwan’s NHI

About Myself

Graduate of Yang Ming Medical School, NTU School of Public Health and HSPH

Joined the Government for 16 years before change career as Biotech Venture Capitalist

Head of DOH’s IT Department, Founding DG of CDC, Head of BNHI……

Teaches at YMU, “Case Studies in Health Policy”, on top of my job as an investor.

"The average citizen pays 20 U.S. dollars per person, per month."

"They can go to any doctor, any hospital they want. They pay, on the average, two U.S. dollars and a maximum of about 10 U.S. dollars each visit. And we don't have a waiting list."

Hong-jen Chang, ABC News October 25, 2003

Biodiscover

1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 20030

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

5.5

6

6.5

3.994.1

4.37 4.29 4.294.37

4.24 4.2

4.67 4.77

4.88 4.93

5.27 5.29 5.27 5.335.46

5.435.9

6.03

6.26

0.8127715301307510.82226675907022

0.8127333862764650.7704684695835140.6853902164465160.5938969276253240.5138857204605770.4720938817975370.466097589855650.4563658377572880.5154313845118130.453389135073035

0.442356665280075

1.648408755482571.843076289123231.883986955713632.00507457144626

2.762934781059862.92780766074942.940434881794283.055185761111553.144274965284883.11280825390912

3.38080912208363.477351058591833.58856771810923

2.205500239050452.103429545411982.181369650068432.1582399900984

1.821057581327751.767364321902551.814208700037221.803353880231351.845014478089111.866857077809862.004922895672482.101797144263912.23207491655083

National Health Expenditures as % of GDP1983-2003

YEAR

% of GDP

Total Health Expenditures

Private Sector

Health Insurance

Government Soctor

NHI

石曜堂

Hongjen Chang, MD, MPH, MSAdjunct ProfessorNational YangMing University

Money or Life?

Bridging cultural differences for a sustainable Health care system

Meiji Ishin heralded the introduction of modern health care system to Asia

Otto Von Bismarck 1815-1898

楢山節考 Narayama Bushiko

(1983 今村昌平 )

Money or Life?

Narayama Bushiko

“the custom, harshly implacable to Occidental eyes, of transporting the aged and infirm rustic villagers to the barren heights of Mount Narayama, where a rough nature soon solves the problem of feeding and maintaining them. In the Japan of long ago………, the approach to the geriatric enigma was drastic but simple. “

The New York Times, June 20, 1961

The Health Care Cost of Smoking

11

Conclusions: If people stopped smoking, there would be a savings

in health care costs, but only in the short term. Eventually,

smoking cessation would lead to increased health care costs.

(N Engl J Med 1997;337:1052-7.)

願付法(Willingness to Pay)

How to valuate

Life ？

The Black and

White Pill 12

Wikimedia PHenry

13

SUPPOSE A PERSON FACES A HAZARD THAT WILL KILL HIM OR HER WITH PROBABILITY “P”, IF HE SURVIES, HE WILL LIVE HIS NORMAL LIFE WITH WHATEVER WEALTH HE POSSESSES. HOWEVER, SOMEONE ARRIVES WITH A WHITE PILL THAT IF TAKEN WILL SURELY ELIMINATE THE DEATH RISK FROM THIS HAZARD. HOW MUCH “X” WOULD THE INDIVIDUAL BE WILLING TO PAY FOR THE WHITE PILL?

(B) THE WHITE PILL EXPERIMENT

FUTURE LIFE

LOTTERY

O

O

O

O

BUY WHITE PILL

REFUSE WHITE PILL

(WEALTH W - X)

(WEALTH W)

FUTURE LIFE

LOTTERY

LIVE

(WEALTH W)NODE

(WEALTH W)

DIE

HongJen Chang

14

10-9 10-8 10-7 10-6 10-5 10-4 10-3 10-2 10-1 100

1

10

102

103

104

105

106

107

108

PMAX

＝ 0.10

PROBABILITY OF DEATH (HOWARD)

AN ILLUSTATIVE RESULT (BLACK PILL)

$X

HongJen Chang

THE WTP APPROACH

15

(A) THE BLACK PILL EXPERIMENT

A PERSON IS OFFERED THE CHANCE TO TAKE A PILL THAT WILL KILL HIM INSTANTLY AND PAINLESSLY WITH PROBABILITY “P”, IF HE TAKES THE PILL, HE WILL RECEIVE $X. SHOULD HE ACCEPT?

FOR EXAMPLE, SHOULD THE PERSON ACCEPT A P = 1/10,000 INCREMENTAL CHANCE OF DEATH FOR A PAYMENT OF $1,000?

O

O

O

O

REJECT BLACK PILL

ACCEPT BLACK PILL

(WEALTH W)

(WEALTH W + $X)

FUTURE LIFE

LOTTERY

LIVE

(WEALTH W + $X)P

(WEALTH W + $X)

FUTURE LIFE

LOTTERY

I - P

DIE

HongJen Chang

16PROBABILITY OF DEATH (HOWARD)

$X

10-9 10-8 10-7 10-6 10-5 10-4 10-3 10-2 10-1 100

1

10

102

103

104

105

106

107

AN ILLUSTATIVE RESULT (WHITE PILL)

Ve =“ECONOMICVALUE OFLIFE”

HongJen Chang

Japan’s Co-payment reform, 2002

Under 3: 20% 3-69: 30% 70 and above: 10% (high income 20%)

› Younger senior (70-74)› Elder senior (75 and above)

Japan’s Health care reform, 2006

2006: Senior citizen (> 70) with annual income above 6.3 million Yen, › copayment rate 20% 30%

2008: 70-74 10 % 20% 2008 – 20% copayment extend to

preschool from the previous under 3

Professor Naoki Ikegami at the World Bank , 2004

…Japan has dealt with financing constraints in light of its stagnating economy. In addition to gradual restructuring, co-pays and premiums have increased significantly. Workers who had no co-payment twenty years ago now are responsible for 30% of their medical fees.

And we proudly announce the 50 million uninsured!

ehbs.kff.org

Tony Blair’s expensive Breakfast

BBC

A poor report card

The NHS fails its own bewilderingly complicated health check

The Economist, Oct. 2006

www.economist.com

SolidarityThe rich pay for the poor

The healthy pay for the sickThe young pay for the

elderly

Peter Smith Professor, University of

YorkOct. 12, 2004 Gastein,

Austria23

Mission statement of the Singaporean Minstry of Health

Good health is to a great extent the responsibility of the individual. The Ministry also plays a key role in reducing illness in Singapore through the control and prevention of diseases and ensuring that the resources are allocated appropriately to do this

Ensuring Singaporeans have access to good and affordable healthcare that is appropriate to needs while emphasize the principle of co-payment.

China

A three tier system with MSA, Deductibles, and limited benefit catastrophic insurance covering urban workers

125 cities > 1 million by 2010

Wikimedia Shizhao

Copyright ©2008 by Project HOPE, all rights reserved.

Winnie Yip and Ajay Mahal, The Health Care Systems Of China And India: Performance And Future Challenges, Health Affairs, Vol 27, Issue 4, 921-932

26

Health Affairs

Copyright ©2008 by Project HOPE, all rights reserved.

Winnie Yip and William C. Hsiao, The Chinese Health System At A Crossroads, Health Affairs, Vol 27, Issue 2, 460-468

27

Health Affairs

Health Spending and Health Status Indicators in Selected OECD Countries and Taiwan, 2004

Countries

Total healthspending as

% of GDP

Total healthspending per person (US$ PPP)

Life expectancy at birth (years) 　

Infant mortalityrate (per 1,000 live births)

Taiwan 6.26 1,440 76.4 2.9

Japan 8.0** 2,249* 82.1 2.8

Czech Republic

7.3 1,361 75.8 3.7

Poland 6.5 805 75.0 4.2

Germany 10.9* 3,005** 78.6 6.8

U. K.8.3 2,546 77.8* 5.1

United States15.3 6,102 76.8* 6.9**

*2000 figures**2003 figures

HongJen Chang

29

資料來源 : 1. OECD Health Data,2000~2002 2. 行政院衛生署編印之中華民國 89 年衛生統計動向 3. International Health Policy 之 Chart VIII-5 from Multinational Comparisons of Health System Data,2000

Percentage of GDP Spent on Health Care

13.0%

10.6%

9.5% 9.1%8.3% 8.1% 8.0% 7.8%

7.3%6.6%

5.9% 5.4%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

United

States

[2000]

Germany

[2000]

France

[2000]

Canada

[2000]

Australia

[2000]

OECD

Median

[2000]

New

Zealand

[2000]

J apan

[2000]

United

Kingdom

[2000]

Finland

[2000]

Korea

[2000]

Taiwan

[2000]

HongJen Chang

30

資料來源 : 1. OECD Health Data,2000~2002 2. 行政院衛生署編印之中華民國 89 年衛生統計動向 , 主計處 91 年 8 月 13 日國情統計通報專題分析 3. International Health Policy 之 Chart VIII-1 from Multinational Comparisons of Health System Data,2000

US Dollars

HongJen Chang

31

Per Capita Expenditures on Pharmaceuticals,Adjusted for Cost-of-Living Differences

484 478

405

301 300

239 237 234 229

193

125106

0

50

100

150

200

250

300

350

400

450

500

France

[1999]

United

States

[1999]

Canada

[2000]

J apan

[1998]

Germany

[1998]

OECD

Median

[1998]

Australia

[1998]

Finland

[1999]

United

Kingdom

[1997]

New

Zealand

[1997]

Korea

[1999]

Taiwan

[2000]

US Dollar

資料來源 : 1. OECD Health Data,2000~2001 2. 行政院衛生署編印之中華民國 89 年衛生統計動向 , 主計處 91 年 8 月 13 日國情統計通報專題分析 3. International Health Policy 之 Chart VIII-9 from Multinational Comparisons of Health System Data,2000

HongJen Chang

32

資料來源 : 1. OECD Health Data,2000~2001 2. 行政院衛生署編印之中華民國 89 年衛生統計動向 , 主計處 91 年 8 月 13 日國情統計通報專題分析 3. International Health Policy 之 Chart VIII-9 from Multinational Comparisons of Health System Data,2000

Annual Physician Visits per Capita

16.0

6.5 6.5 6.4 6.3 6.0 5.44.3

11.8

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

J apan

[1996]

Germany

[1996]

France

[1996]

Canada

[1998]

Australia

[1999]

United

States

[1996]

United

Kingdom

[1998]

Finland

[1999]

Taiwan

[2000]

No. of visit

HongJen Chang

33

資料來源 : 1. OECD Health Data, 2000~2001 2. 行政院衛生署編印之中華民國 89 年衛生統計動向 , 主計處 91 年 8 月 13 日國情統計通報專題分析 3. International Health Policy 之 Chart VIII-9 from Multinational Comparisons of Health System Data,2000

Per Capita Expenditures on Hospital Care,Adjusted for Cost-of-Living Differences

$1,764

$1,080

$930$867 $827 $804

$675 $645 $629$529

$251 $250

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

UnitedKingdom[1995]

Canada[2000]

France[1999]

UnitedStates[1999]

Australia[1997]

Germany[1998]

Japan[1998]

NewZealand[1993]

Finland[1999]

OECDMedian[1998]

Korea[1999]

Taiw an[2000]

US Dollar

HongJen Chang

World health Report 2000

Evaluation of Health System› Overall level of Health› Distribution of Health in the

population› Overall level of responsiveness› Distribution of responsiveness› Distribution of financial

contribution

High-performing Health systems

The OECD Health ProjectQuality: Better Health through better

careAccess to careResponsiveness: SatisfactionHealth care spending: affordability and

sustainable financingEfficiency: value for money

35

The Performance of NHI Universality Accessibility Affordability Sustainable Financing Responsiveness Equity Efficiency Public Satisfaction

36

Integration of Social Health Insurance

37

Labor Insurance

Medical benefits

Gov’t Employee Insurance

Medical benefits

Farmer Insurance

Medical benefits

Other insurance programs

Medical benefits

Uninsured (40%)

National Health Insurance

(99% of population)1995

HongJen Chang

Universal Coverage (2003)

38

Insured

BEFORE NHI AFTER NHI

Uninsured (8.6 million)

Insured

Uninsured1.33%

98.67%

41%

59%

HongJen Chang

保險憑證 - 健保 IC 卡

註 記 內 容 ：重要檢查及藥品處方登錄、各項就醫紀錄登 錄、重大傷病登錄、器官捐贈或安寧緩和醫 療意願登錄等。 使用率監控：透過檔案分析，對於高利用率案件進行管理。 傳染性疾病追蹤： H1N1 、 SARS

39

1234 5678 9012

89/12/31

B123456789楊志良

HongJen Chang

National Health Expenditures as % of GDP 1991~2009

4.45 4.68

4.81 4.87

5.25 5.36 5.35 5.43 5.60 5.53

5.88 5.96 6.15 6.20 6.24 6.25 6.16

6.45

6.87

2.09 2.13 2.22 2.21

1.95 1.91 2.03 2.08 2.16 2.21 2.27 2.36 2.45 2.55 2.69 2.67 2.60

2.76 2.90

1.60 1.78 1.82

1.94

2.66 2.89 2.84 2.91 3.00 2.90

3.12 3.18 3.21 3.19 3.18 3.17 3.16 3.32

3.52

0.76 0.77 0.77 0.72 0.64

0.56 0.48 0.44 0.44 0.42 0.48 0.42 0.49 0.47 0.37 0.40 0.40 0.36 0.44

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Total Health Expenditures Private Sector

Health Insurance Government Sector

%of GDP

Year

HongJen Chang

Satisfaction Rate

39.0%

50.2%

61.0%

65.4% 66.5% 68.3%

63.3% 63.8%

67.2%

65.6%

71.1%

78.50%

66.40%

59.70%

70.90%

76.30%

47.0%

36.5%

27.0%

22.5%

23.4%

22.0%

25.9% 24.5%

24.2%20.1%

17.2%

13.60%

21.60%

29.60%

20.60%15.90%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Satisfied Dissatisfied

41

(1995～ 2004)

Satisfied (DOH)Satisfied (BNHI)

Dissatisfied (DOH)Dissatisfied (BNHI)

1995/5 1995/9 1996/6 1998/1 1998/4 1998/11 1999/5 2000/3 2000/10 2001/6 2001/12 2002/5 2002/8 2002/11 2003/7 2004/4

HongJen Chang

42

Satisfaction level (%) very good good moderate bad

very bad

not sure N/A refusal

Overall satisfaction 6.3 42.0 31.6 11.9 2.8 5.4 --- 0.0

Dignity 31.3 50.4 11.8 3.6 0.7 2.3 --- 0.0

Autonomy 21.8 43.1 13.6 4.1 0.9 9.2 4.7 2.7

Confidentiality 12.4 21.0 6.5 3.5 0.9 34.0 13.6 8.2

Prompt attention 8.9 39.0 28.0 17.7 2.6 3.9 --- 0.0

Communication 27.3 51.9 16.3 3.3 0.3 0.8 --- 0.1

Quality of basic amenities 20.6 53.7 21.7 2.6 0.1 1.2 --- 0.1

Choice of care provider 23.7 48.1 13.6 3.7 0.8 6.0 2.6 1.5

Public satisfaction with the health system according to WHO criteria

HongJen Chang

Rank country index1 Colombia 0.992* Taiwan 0.992

(1994 : 0.881)

2 Luxembourg 0.9813-5 Belgium 0.9793-5 Djibouti 0.9793-5 Denmark 0.9796-7 Germany 0.9788-11 Japan 0.9778-11 United Kingdom 0.97712-15 Sweden 0.97617-19 Canada 0.97420-22 Netherlands 0.97338-40 Switzerland 0.96453 South Korea 0.95554-55 US 0.954101-102 Singapore 0.929188 China 0.638

* :Taiwan index for 1998

43

Fairness of financing contribution to health

systems in selected countries, WHO index, 1997

HongJen Chang

The Performance of NHI

Universality: 99% Accessibility: Free Choice Affordability: Inexpensive. Equity: Fairer but … Sustainable Financing: WTP? Responsiveness: Fair Efficiency: High (Hospitals, BNHI) Public Satisfaction: High (too

high ?)

44

Possible Factors Contributing tothe Success of Taiwan’s NHI

Single-payer system Competitive market on the health

care delivery side Information technology offers

additional cutting edge management tool for NHI› 100% electronic claim processing› smart card

Strong generic pharmaceutical industry

Family support Diligent health care workers

45

Challenges of the Future

Cost pressure from aging of the population and introduction of new medicine and technology

Doctor shopping and over prescription resulting in duplication and waste is an increasing public concern

Demand for health care outstrips our willingness to pay

Political pressure To privatize the BNHI and/or to

introduce multi-payer system Hospitals and doctors are increasing

dis-satisfied in the system

46

Thank you

47

Wikimedia Martin Belam

PAGE WORK LICENSE AUTHOR/SOURCE

5 This work is from: http://www2.biodiscover.com/news/healthcare/article/82231.html , and used subject to http://www.biodiscover.com/agreement.htmlThis work is used subject to the fair use doctrine of Article 52, 65 Taiwan Copyright Act by GET.2012/8/10 visited

6 This work is from 石曜堂 < 我們要往哪裡走？－健康照護再造的前瞻思維－ >, 《醫療爭議審議報導系列 45 》 , p6, Bureau of National Health Insurance, 2010.3.and used subject to the fair use doctrine of the Taiwan Copyright Act Article 50 by GET

8 Wikipedia Evert A. Duykinck http://zh.wikipedia.org/wiki/File:Otto_von_Bismarck.JPG

8 Wikimedia commons Geographicus Rare Antique Mapshttp://commons.wikimedia.org/wiki/File:1781_Japanese_Temmei_1_Manuscript_Map_of_Taiwan_and_the_Ryukyu_Dominion_-_Geographicus_-_TaiwanRyukyu-unknown-1781.jpg

9 This楢山節考movie poster is from:http://www.cinemaffiche.com/recherche.php?langue=en&jours=0&ligne1=2&ligne2=2&page=1&lettre=B&motif= This work is used subject to the fair use doctrine of Article 52, 65 Taiwan Copyright Act by GET.2012/8/10 visited

12 Wikimedia commons PHenryhttp://commons.wikimedia.org/wiki/File:PharmacistsMortar.svg

13 National YangMing UniversityHongjen Chang

PAGE WORK LICENSE AUTHOR/SOURCE

14 National YangMing UniversityHongjen Chang

15 National YangMing UniversityHongjen Chang

16 National YangMing UniversityHongjen Chang

20 Kaiser/Hret 2003 Survey and CNN/money calculationshttp://money.cnn.com/2003/09/09/pf/insurance/employerhealthplans/ This work is used subject to the fair use doctrine of Article 52, 65 Taiwan Copyright Act by GET.2012/8/10 visited

21 BBC Election2010http://news.bbc.co.uk/2/hi/uk_news/politics/election_2010/parties_and_issues/8645845.stm This work is used subject tohttp://www.bbc.co.uk/terms/personal.shtml#113.2/3.2.3 (i) 2012/8/10 visited

22 The Economist, Oct. 2006This work is used subject to the fair use doctrine of Article 52, 65 Taiwan Copyright Act by GET.2012/8/10 visited

25 Wikimedia commons Shizhaohttp://commons.wikimedia.org/wiki/File:Wumen.jpg

PAGE WORK LICENSE AUTHOR/SOURCE

26 Winnie Yip and Ajay Mahal, The Health Care Systems Of China And India: Performance And Future Challenges, Health Affairs, Vol 27, Issue 4, 921-932

27 Winnie Yip and William C. Hsiao, The Chinese Health System At A Crossroads, Health Affairs, Vol 27, Issue 2, 460-468Copyright ©2008 by Project HOPE, all rights reserved.

28 National YangMing UniversityHongjen Chang可能需要來源！

29 National YangMing UniversityHongjen Chang

30 National YangMing UniversityHongjen Chang

31 National YangMing UniversityHongjen Chang

32 National YangMing UniversityHongjen Chang

33 National YangMing UniversityHongjen Chang

37 National YangMing UniversityHongjen Chang

Percentage of GDP Spent on Health Care

13.0%

10.6%

9.5% 9.1%8.3% 8.1% 8.0% 7.8%

7.3%6.6%

5.9% 5.4%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

United

States

[2000]

Germany

[2000]

France

[2000]

Canada

[2000]

Australia

[2000]

OECD

Median

[2000]

New

Zealand

[2000]

J apan

[2000]

United

Kingdom

[2000]

Finland

[2000]

Korea

[2000]

Taiwan

[2000]

Per Capita Expenditures on Pharmaceuticals,Adjusted for Cost-of-Living Differences

484 478

405

301 300

239 237 234 229

193

125106

0

50

100

150

200

250

300

350

400

450

500

France

[1999]

United

States

[1999]

Canada

[2000]

J apan

[1998]

Germany

[1998]

OECD

Median

[1998]

Australia

[1998]

Finland

[1999]

United

Kingdom

[1997]

New

Zealand

[1997]

Korea

[1999]

Taiwan

[2000]

Annual Physician Visits per Capita

16.0

6.5 6.5 6.4 6.3 6.0 5.44.3

11.8

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

J apan

[1996]

Germany

[1996]

France

[1996]

Canada

[1998]

Australia

[1999]

United

States

[1996]

United

Kingdom

[1998]

Finland

[1999]

Taiwan

[2000]

Per Capita Expenditures on Hospital Care,Adjusted for Cost-of-Living Differences

$1,764

$1,080

$930$867 $827 $804

$675 $645 $629$529

$251 $250

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

UnitedKingdom[1995]

Canada[2000]

France[1999]

UnitedStates[1999]

Australia[1997]

Germany[1998]

Japan[1998]

NewZealand[1993]

Finland[1999]

OECDMedian[1998]

Korea[1999]

Taiw an[2000]

PAGE WORK LICENSE AUTHOR/SOURCE

38 National YangMing UniversityHongjen Chang

39 National YangMing UniversityHongjen Chang

40 National YangMing UniversityHongjen Chang資料來源？ (“應該”是老師自己畫的，從全民健保資料庫弄來的@@)

41 National YangMing UniversityHongjen Chang資料來源？

42 National YangMing UniversityHongjen Chang資料來源？

43 National YangMing UniversityHongjen Chang資料來源？

47 Wikimedia Commonshttp://commons.wikimedia.org/wiki/File:Lighthouse_at_night,_Chania.jpg