He then links an article from Dylan Matthews over at the Left-leaning Vox that argues how Taiwan's single-payer healthcare system is a success. It makes for a good read if you are looking for an argument in favor of single-payer healthcare and want to use Taiwan as a case study. Essentially, Sanders is arguing that if it can work in Taiwan, it can work here. Let's see a) how well single-payer works in Taiwan, and b) whether we can do it here.
How Well Does Taiwan's Single-Payer System Work?
I actually covered this topic in 2016, but some things merit repeating (not to mention updating for the latest available figures). Let's list some of the merits of the Taiwanese healthcare system first:
- Low cost as percent of GDP. In 2017, Taiwan paid 6.4 percent of its GDP in healthcare. This amount is below the OECD average of 8.8 percent, and certainly below the U.S. amount of 17.2 percent of GDP (OECD). Taiwan has also been able to keep its costs steady in terms of spending as a percent of GDP.
- High Satisfaction Rate for Patients. Most Taiwanese are satisfied with the NHI, with a record-high amount of 89.7 percent.
- Short Waiting Periods. Unlike its counterparts in Canada and the United Kingdom, Taiwan is known for keeping its waiting periods for procedures short. This surely is an important metric for access to medical care.
- Comprehensive Coverage. Taiwanese health care provides many services, including inpatient and outpatient care, mental health care, prescription drugs, dental care, Chinese medicine, and dialysis care.
While these are advantages, the Taiwanese healthcare system does come with its limitations:
Why Single-Payer Wouldn't Work Here
Let's assume that you are okay with a depleting reserve fund, lagging behind in medical advancements, overcrowded hospitals, and disgruntled healthcare providers. For argument's sake, let's assume that the benefits of the Taiwanese system outweigh the costs. The single-payer would not work in the United States, certainly in the Pollyannish view that Sanders is looking at single-payer with his rose-colored glasses.
I took coursework on comparative politics in college, and one of the main lessons was that "what might work in one country might not work in another country." This is showing to be the case with something as complicated and interconnected as healthcare. Taiwan is a small, ethnically homogenous island nation that does not have the geographic size or socioeconomic disparities to contend with that the United States does.
Here is another major difference. Taiwan was still not a democracy in the 1980s. It took some willpower of the people to reach this stage, especially since the healthcare system in Taiwan was so broken. When Taiwan implemented its single-payer system in the 1990s, it was practically starting with a blank slate. It did not have to contend with the interactions and interweaving between the private and public sectors that has created the leviathan of U.S. healthcare.
This leads to another interesting point. Uwe Reinhardt, the economist who helped Taiwan create its single-payer system, said that single-payer should not happen in the United States. The reason is that the doctors have such lobbying power that single-payer could never work in the United States. Taiwan instituted its single-payer when costs were low and the government was able to keep prices artificially low by fiat. It is inconceivable to see the U.S. hospital and insurance lobbies relinquish that sort of power.
If Dylan Matthews' article illustrates anything, it is that a single-payer system comes with great sacrifice and considerable drawbacks. And to think this was in a country that had relatively favorable conditions!
There are issues with the United States healthcare system, and I don't just mean Obamacare. I think about the United States and how there is excessive testing and underutilization of preventative care that is brought on by employer-sponsored insurance, a feature that does not exist in other countries. As I brought up last May, there are a lot of painstaking questions that proponents would have to answer, and that is without considering how the Taiwanese system is so different from the U.S. system.
As much as I think there are issues with the current U.S. healthcare system, I do not think that emulating Taiwan is the way to go when our systems are so different. I can at least take some solace that there is not enough traction for single-payer in this country. What does worry me is that popular opinion is trending in a direction that could bring this unmitigated disaster to the United States.
- Yes, there is high patient satisfaction. The same cannot be said for the doctors. Less than half of health care providers are satisfied and the burnout from Taiwanese doctors is high. In Singapore, a doctor only sees about 20 patients a day. In Taiwan, that number is 80 to 100. As the centrist Brookings Institution brings up in its 2015 analysis, the system is too generous towards patients.
- One of the major flaws of the single-payer healthcare system is that demand for healthcare exceeds supply. It means that there needs to be a rationing mechanism to deal with the shortage. For Canada, it is longer waiting times. In the United Kingdom, it means limiting healthcare coverage. Taiwan is able to ration healthcare by keeping consultation times shorter than average.
- As Dylan Matthews brought up in his piece, "Hospitals in Taiwan are crowded. The capacity of health care providers to attend to everyone can be stretched pretty thin."
- Since its inception, the Taiwanese healthcare system has struggled with sustainable financing. While it was able to get its deficit spending under control, its surpluses have been on the decline (National Health Insurance Statistics, 2018, p. 129). Plus, there has been pressure in Taiwan to increase the copayments that patients pay because its reserves are expected to be depleted in the next couple of years. An aging Taiwanese population and advancing medical technology will only put upward pressure on healthcare costs.
- The single-payer system causes yet another issue: discouragement of new innovations. This is especially true with pharmaceuticals. The low prices that Taiwan sets with its monopsony power gives drug producers (and indeed all healthcare goods producers) a disincentive to sell their products in Taiwan. Without a reimbursement price, there are delays for innovations to reach the Taiwanese market.
Why Single-Payer Wouldn't Work Here
Let's assume that you are okay with a depleting reserve fund, lagging behind in medical advancements, overcrowded hospitals, and disgruntled healthcare providers. For argument's sake, let's assume that the benefits of the Taiwanese system outweigh the costs. The single-payer would not work in the United States, certainly in the Pollyannish view that Sanders is looking at single-payer with his rose-colored glasses.
I took coursework on comparative politics in college, and one of the main lessons was that "what might work in one country might not work in another country." This is showing to be the case with something as complicated and interconnected as healthcare. Taiwan is a small, ethnically homogenous island nation that does not have the geographic size or socioeconomic disparities to contend with that the United States does.
Here is another major difference. Taiwan was still not a democracy in the 1980s. It took some willpower of the people to reach this stage, especially since the healthcare system in Taiwan was so broken. When Taiwan implemented its single-payer system in the 1990s, it was practically starting with a blank slate. It did not have to contend with the interactions and interweaving between the private and public sectors that has created the leviathan of U.S. healthcare.
This leads to another interesting point. Uwe Reinhardt, the economist who helped Taiwan create its single-payer system, said that single-payer should not happen in the United States. The reason is that the doctors have such lobbying power that single-payer could never work in the United States. Taiwan instituted its single-payer when costs were low and the government was able to keep prices artificially low by fiat. It is inconceivable to see the U.S. hospital and insurance lobbies relinquish that sort of power.
If Dylan Matthews' article illustrates anything, it is that a single-payer system comes with great sacrifice and considerable drawbacks. And to think this was in a country that had relatively favorable conditions!
There are issues with the United States healthcare system, and I don't just mean Obamacare. I think about the United States and how there is excessive testing and underutilization of preventative care that is brought on by employer-sponsored insurance, a feature that does not exist in other countries. As I brought up last May, there are a lot of painstaking questions that proponents would have to answer, and that is without considering how the Taiwanese system is so different from the U.S. system.
As much as I think there are issues with the current U.S. healthcare system, I do not think that emulating Taiwan is the way to go when our systems are so different. I can at least take some solace that there is not enough traction for single-payer in this country. What does worry me is that popular opinion is trending in a direction that could bring this unmitigated disaster to the United States.
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