Medical industry calls for NHI to shift to 'expenditure target' system

Taipei, May 7 (CNA) Representatives from the medical industry urged the government on Monday to transition the National Health Insurance (NHI) set-up from an "expenditure cap" system to an "expenditure target" system in hopes of authorities allocating extra funds.

Representatives from the medical industry called for the shift to an "expenditure target" system with a service volume target and fixed "point value" to payment ratio, during a public hearing in Taipei on Monday.

The representatives suggested that "extra expenditure" could be reimbursed at a reduced rate. They added these changes would require an additional budget of around NT$60 billion (US$1.85 billion), lower than the authority estimate of between NT$70 billion and NT$100 billion.

This year, the budget for the NHI system is around NT$870 billion.

Under the current "expenditure cap" system, the NHI system has an annual fixed budget which covers five major categories of medical services: treatments provided in hospitals, clinics and dialysis centers, as well as those by dentists and Chinese medicine practitioners.

NHI reimburses healthcare facilities for services provided through its "point value" system. This unit is convertible to New Taiwan Dollar and the rate changes quarterly to align overall expenditure with the predetermined budget. Therefore, a higher service volume means a lower point value and lower payments to providers.

From 2018 to 2022, the average ratio of point value to money paid out for the five major categories of medical services has hovered around 1 to NT$0.8 to 1 to NT$1.2, and around 1 average point value to NT$0.9 most of the time. This means many healthcare facilities were not fully reimbursed for their services.

Since the implementation of the NHI "Global Budget Payment System" around 20 years ago, the gap between medical demand and the budgetary shortfall has long been borne by medical institutions, said Hung Tzu-jen (洪子仁), chairman of the Taiwan College of Healthcare Executives.

National Health Insurance Administration (NHIA) Director-General Shih Chung-liang (石崇良) noted that there are pros and cons of the "expenditure target" system.

For example, he said, a hospital could opt to decrease the number of treatments offered to patients when it nears its expenditure target to mitigate the costs associated with only being reimbursed at a reduced rate.

But a uniform point value system, where the ratio of point value and funds paid remains the same, may lead to an unnecessary surge in service provision driven by profit motives, Shih added.

The calls from the medical professionals followed two recent draft amendments to the National Health Insurance Act made by opposition Kuomintang (KMT) lawmakers.

The amendments stipulate the value of "one point" should be no less than NT$0.95 or equal to NT$1 and that any over-budget expenditure should be covered by the public purse -- not medical institutions.

Health Minister Hsueh Jui-yuan (薛瑞元), who will leave office after May 20, stated on May 2 that he anticipated if the bill were to pass, the fees for next year's NHI could increase.