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Negative diagnosis

Universal healthcare systems in East Asia are creaking under long lines, doctor shortages, and rapidly aging populations

Negative diagnosis

A gastroenterologist examines an elderly patient in Suzaka, Japan. (Ko Sasaki/Bloomberg via Getty Images)

TAIPEI, Taiwan, and SAPPORO, Japan—At 9 a.m., the Shuanglian street market overwhelms the senses: the smell of rice cakes sizzling on iron griddles, the sounds of colloquial Taiwanese as old women haggle over the price of fresh pumpkin, and an arresting assortment of fruits. Deep orange persimmons, green guavas, and rosy apples compete for attention. While a steady stream of shoppers pick up the day’s groceries, the real crowds are a block away inside Mackay Memorial Hospital, one of the largest hospitals in Taiwan.

Inside the hospital, originally founded by 19th-century Canadian missionary George Leslie Mackay, halls throng with people: Indonesian orderlies push white-haired men in wheelchairs, middle-aged patients wait in long lines for prescriptions, wrinkled old women wear face masks. In the waiting room, all the plastic chairs are occupied, with rows of people standing by the back wall waiting for their number to be called.

The crowded hospital is one result of easy medical access for the 23 million Taiwanese under the National Health Insurance, a single-payer universal healthcare system. Seeing a doctor is cheap for patients—they pay $5 for a clinic visit or $15 to visit a top hospital like Mackay—so Taiwanese go see the doctor for every little cough and cold. Taiwan passport holders living around the world return to the island for medical procedures and to stock up on medicine.

This type of inexpensive medical care is typical in East Asian countries such as South Korea, Japan, and Singapore. Healthcare spending per capita is $3,713 in Japan and $2,546 in Taiwan, both of which are substantially less than the $9,086 spent in the United States. These national health insurances are funded by premiums paid by employers and employees, co-pays, and government subsidies, while the government controls the amount of money doctors, hospitals, pharmaceuticals, and medical equipment companies receive. This means that Japan can cap its healthcare spending at 8.5 percent of its GDP (and 6.6 percent for Taiwan), less than half of the 18 percent spent by the United States.

But the question is how long these systems can last. Many of these countries have found that low salaries for doctors and nurses have led to personnel shortages, low reimbursement rates for prescriptions keep new medicine from entering the countries, and overcrowded hospitals mean more time spent treating small illnesses and less time dealing with more complicated cases.

The biggest crisis relates to demographics. Taiwan and Japan are two of the fastest-aging populations in the world, meaning the countries will need to depend on a smaller workforce to support a growing elderly population that will require more medical attention. Lawmakers and medical experts debate about where they’ll find the money to keep the systems afloat, especially as their economies stagnate.

Soon, it could be a problem on the other side of the Pacific as well: The U.S. fertility rate is decreasing rapidly from 3.6 in 1960 to the current level of 1.87, less than the replacement level of 2.1. As the United States debates the future of its own healthcare system, it may help to look at the successes and failures of others, while realizing no one-size-fits-all solution exists.

David Chang/EPA/Newscom

Kidney patients receive dialysis at Wanfang Hospital in Taipei, Taiwan. (David Chang/EPA/Newscom)

Japan was an early adopter of universal healthcare, starting its program in 1961 as the country began its rapid economic growth. Since then life expectancy has risen from 68 to 83 years, the second highest in the world, as the infant mortality rate dropped to the lowest in the world. The World Health Organization (WHO) ranks Japan as the 10th-best healthcare system, a full 27 spots ahead of the United States.

Taiwan’s healthcare system is much newer, starting in 1995 and quickly nearly doubling the percentage of the population covered—from about 54 percent to 99 percent. Public satisfaction with the system remains high at 80 percent, as residents’ out-of-pocket expenses are capped at $1,550 a year and those with “catastrophic illnesses” such as cancer or kidney disease have their medical costs completely covered.

In both Japan and Taiwan, residents can theoretically see any doctor they wish to see as clinics are ubiquitous, and the government requires hospitals to accept every patient regardless of whether they have a referral. The healthcare system extends to expats as well, which greatly helped Jackie Zuiderhof, a South Dakota native, who suffered from severe stomach pains while living in both Japan and Taiwan. In Japan, where she worked as a missionary, she remembers paying $10 monthly premiums for health insurance, and a $10 co-pay at the hospital. She’d spend about 10 to 30 minutes in the waiting room before seeing doctors who spent little time explaining her problems, but gave her antibiotics and tests. Her CT scan cost $100 out of pocket.

After moving to Taiwan to teach English in 2014, the stomach pains returned, and so she made more trips to the hospital, often waiting over an hour to see a doctor. Each visit cost $14, and the most expensive bill she paid was $25 for a CT scan. While the tests have all come up negative and the doctors have yet to diagnose her problem, she noted the relief of being able to afford healthcare, especially since only 1.3 percent of her paycheck went toward the health insurance.

Healthcare in East Asian countries is less expensive than in the United States for several other reasons: Patients file fewer malpractice suits as the countries lack malpractice lawyers and cases are often delayed. Administrative costs are also much lower. In Taiwan, administrative costs make up only 1 percent of healthcare spending as the island has a digitized administrative system: Each resident’s insurance card includes a chip with all the patient’s information, such as previous prescriptions and doctors’ visits, creating a real-time database.

Yet the cost of medical care in Japan is increasing due to new medical technology, a graying population, and the country’s wealth, which encourages people to seek more care, according to consulting firm McKinsey & Company. At the same time, the economies of both Japan and Taiwan are stagnating, with widening gaps between revenues and expenditures. Michael Chung, a National Taiwan University professor who worked on revamping Taiwan’s healthcare in 2012, noted that the current financial model falls apart because “in healthcare, you can never stay where you are. You always need new technology and new facilities.”

Jeon Heon-Kyun/EPA/Newscom

A patient walks in front of a closed emergency room, at Seoul Boramae Hospital in Seoul, South Korea. (Jeon Heon-Kyun/EPA/Newscom)

Doctors in these countries often have serious complaints about the healthcare systems that are common anywhere with highly subsidized care. Because of the low cost of visiting a doctor, Japanese and Taiwanese visit their doctors three times more often than Americans, overloading doctors who see a large volume of patients each day.

In Japan, hospitals refuse to admit 1 in 6 ambulatory call patients due to staffing shortages, according to the Fire and Disaster Management Agency. In 2009, a story circulated of a 69-year-old man who was hit by a motorcyclist while riding his bicycle. The ambulance came to pick him up, yet 14 hospitals rejected the patient, claiming they lacked the resources to care for him. When a hospital finally admitted him three hours later, he died of hemorrhagic shock.

While the problem is not as serious in Taiwan, residents still visit the hospital for common ailments, leading to overcrowded hospitals and less time for doctors to deal with patients with complicated illnesses. Taiwan’s hospitals and clinics scored a “D” grade in doctor visit times and doctor communication with the patients, according to a 2013 Ministry of Health and Welfare report.

“I think from a doctor’s perspective, it’s bad for us because we can’t heal people,” said Dr. Peter Liu, a psychiatrist at Taipei Veterans General Hospital. Liu says Taiwan should create a referral system or raise the prices for hospital visits. “It’s very convenient for the public, but the medical field has become a service industry, which is bad for nurses and pharmacists.”

Liu has found respect for doctors and nurses slipping in recent years, as patients complain when medical professionals don’t cater to their needs. This makes it more difficult to attract students into the nursing profession as nurses in Taiwan make only about $15,000 a year and don’t get paid for overtime, and hospitals are often short-staffed: Liu’s cousin Melissa Ku, who works as a nurse at Veterans General, said she cares for seven patients during day shifts and 14 at night. A 2015 survey found that 92 percent of nurses in Taiwan considered quitting in the past year, many due to a lack of respect, a poor medical system, and long working hours.

“For us, when there is no more profit in medicine, the quality will decrease,” Liu noted. He’s found that fewer top students want to study medicine because of the long work hours and lower salaries compared with other countries. Those who do become doctors are more likely to merely put in the hours and leave, rather than investing time in research. Liu noted that when he first arrived at Veterans General 13 years ago, everyone wanted to stay at the prestigious facility to advance in his or her field. But now he sees young doctors who work at the hospital for a few years then move to a smaller hospital where they can work fewer hours.

Craig Ferguson/LightRocket via Getty Images

Nurses union members hold a demonstration in Taipei, demanding reform to labor laws. (Craig Ferguson/LightRocket via Getty Images)

The public perception of doctors has also changed in Japan, said Dr. Nomura Takuyuki, who runs a 19-bed hospital in Sapporo, Japan. In the past, students aspired to become doctors, and Japan won numerous Nobel Prizes for medical research. But now physicists and scientists are the ones receiving the Nobel Prizes, as fewer people are willing to work such tiring jobs for lower pay. Nomura sleeps an average of five hours a night and sees an average of 100 patients a day.

As medical school graduates choose higher-paying jobs at clinics or less taxing specialties, the shortage of doctors in specialties such as internal medicine and surgery has increased. Doctors and nurses are also leaving the countries for more lucrative jobs overseas, such as the United States, where nurse salaries average $68,000. Especially with the low birthrates in these countries, doctor shortages are becoming more severe. Japan has one-third fewer doctors than the average for developed countries, and the problem is more severe in sparsely populated rural areas.

The challenges posed by an aging population are most acute in Japan, with the world’s oldest population—26 percent of its 127 million people are over the age of 65. To deal with the problem, the Japanese government set up a public, mandatory long-term care insurance in 2000 where citizens over the age of 40 pay a 1 percent premium and those over 65 are eligible for benefits, including home-based care, adult day care, and nursing homes. Taiwan is also planning to implement a similar long-term care system focused on home care, although professor Chung believes “the trend and pace of demand would be faster than the pace of preparing the system.”

While the benefits of Japan’s long-term care are quite generous, the problem is coughing up the money to keep the entire system running. By 2050, almost 40 percent of Japan’s population will be 65 and older, with Taiwan following close behind at 36 percent. Because of the low birthrates in the two countries, fewer workers will pay into the healthcare system: In 2050, 1.3 Japanese workers will need to support one elderly person, while 1.5 Taiwanese workers will support their elder.

Unless funding mechanisms change, Japan’s healthcare system will face a $163 billion shortfall by 2020, according to McKinsey & Company. Taiwan’s funds are also expected to run out this year or next. To maintain these healthcare systems, the government would need to increase premiums and taxes while cutting benefits. This would face strong resistance from citizens and lawmakers who wish to get reelected.

Chung believes that Taiwan needs to do better at promoting disease prevention, and that the National Health Insurance should teach people to cherish the healthcare that they receive. “Don’t make seeing a doctor so convenient, so easy, and so cheap,” Chung noted. “When people get used to it, there is no road of return. You can’t turn back once it becomes a habit.”


Nurses work in a nearly empty infant unit of a hospital in Seoul, South Korea. (Yonhap/EPA/Redux)

Singapore is unique, covering healthcare on a cost-sharing basis and having 7 to 9 percent of Singaporeans’ paychecks go toward a mandatory health savings account called MediShare, which is tax-free, accrues interest, and can be inherited. Patients use MediShare to pay for their doctors’ visits and procedures, while the hospitals are up-front about their costs.

The government also provides catastrophic medical insurance and elderly care insurance (which can be paid for through MediShare) and a fund for the low-income population. WHO ranks Singapore as the sixth-best healthcare system in the world, with healthcare costs making up only 4 percent of its GDP.

Still, Singapore faces similar concerns with its aging population. The city-state of 5 million is trying to increase the number of doctors by raising salaries for doctors and nurses, as well as recruiting overseas-trained Singaporeans back to their home country.

Back at the Shuanglian street market in Taipei, the streams of shoppers may seem to mask this problem, but it’s one that besets a great many nations: how to care for an aging population with fewer and fewer young people to pay the bills or take the medical jobs, especially when government subsidies already distort the system. Peter Yu, a 30-year-old dermatologist at Cathay General Hospital in Taipei, sees the aging of Taiwan daily, as 60-year-olds accompany their 90-year-old parents into his office. “You can’t cover future costs with the present healthcare because it’s already very tight. You need outside funding,” he said. “I’m worried: Who will take care of me when I’m old?”

Angela Lu Fulton

Angela Lu Fulton

Angela is a senior reporter for WORLD Magazine and a part-time editor for WORLD Digital. She is a graduate of the World Journalism Institute and Northwestern University's Medill School of Journalism. Angela resides in Taipei, Taiwan. Follow her on Twitter @angela818.


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  •  austinbeartux's picture
    Posted: Tue, 04/04/2017 10:29 am

    To me, the solution is simple.  Government needs to stay out of industry--with one exception.  Government should do everything it can to nurture and foster competition in the private sector.  Competition among Dr's, Nurses, Hospitals, Medical Technology providers, etc. means two things--1) innovation and 2) lower prices.

  • Katie
    Posted: Tue, 04/04/2017 10:31 am

    Thank you for this informative article. The United States would do well to pay attention to the healthcare systems of other countries.

  • VT
    Posted: Tue, 04/04/2017 01:48 pm

    Ditto ^