Designing a Healthcare System with Long-term Sustainability

Recognizing that the challenges facing Taiwan’s pharmaceutical market are inextricably linked to the structure and soundess of the overall healthcare system, the board of the International Reasearch-based Pharmaceutical Manufacturers Association (IRPMA) last year decided to prepare a comprehensive set of recommendations for shaping the next generation of Taiwan’s healthcare. The Association commissioned consultancy PwC Taiwan to undertake the project, and a draft report was issued in mid-March this year.

Once recommendations from the document are officially adopted by IRPMA, the Association will engage with government officials, healthcare providers, patient and consumer groups, and other stakeholders in hopes of establishing a longterm vision and strategic goals for Taiwan’s healthcare system and health-related industries. Besides ensuring a high level of care for Taiwan’s patients, including access to new and innovative drugs, the objectives are to help assure the longterm sustainability of the National Health Insurance (NHI) program and to position Taiwan as a biomedical R&D and manufacturing hub with the ability to attract substantial international investment.

The report begins by recognizing the remarkable achievement of Taiwan’s universal healthcare system in delivering high-quality care at affordable costs since its establishment in 1995. Patients enjoy easy access to a comprehensive national network of hospitals and clinics.

However, the lack of an effective gatekeeper mechanism and the “all-you-can-eat” provisions of the NHI system have led to overuse and the wastage of medical resources, and underfunding has brought challenges to healthcare providers in balancing costs and patient care. The system will be under increased strain in the coming years due to demographic pressures, with seniors projected to comprise about 24% of the population by 2030, further driving up healthcare costs. In addition, staff shortages among medical professionals are a growing issue, and the lengthy drug approval and reimbursement process – coupled with the review process’s emphasis on lowering costs – affects the availability of new, innovative drugs. The current combination of a long review time and low prices risks delaying or discouraging the launch of innovative drugs in Taiwan by international pharmaceutical companies.

In response to these challenges, the draft report focuses its attention on three areas – the healthcare system structure, patient access to innovative drugs, and healthcare funding – and makes a series of concrete recommendations.

System structure:

  • Institute an effective gatekeeper system such as a physician-referral mechanism to encourage patients to first visit smaller clinics, creating a multi-tiered healthcare delivery system and relieving pressure on overburdened major medical centers.
  • Fully separate the prescribing and dispensing of drugs, with an expanded role for community pharmacists, to remove the possible compromising of patient interests.
  • Promote health awareness and encourage patient selfcare as preventative measures, as well as self-monitoring and self-medication under appropriate conditions, with doctor visits only when really necessary.
  • Make extensive use of cloud computing to reduce misuse of resources and big data analytics to optimize resource allocation and make more abundant information available to patients and stakeholders.

Access to innovative drugs:

  • Maintain a drug approval and reimbursement process that is based on international standards, is competitive relative to peer countries, and actively encourages the launch of new and innovative medications.
  • Ensure an efficient approval and reimbursement process that balances costs and benefits, emphasizes the quality of care outcomes, and prioritizes patients’ interests above all else.
  • Reform the current decision-making process to increase the involvement of patient groups and medical associations.

Enhance healthcare funding:

  • Expand the involvement of the National Development Council in determining the healthcare budget to ensure that broad social/economic needs are taken into account.
  • Shift a portion of medical costs to patients by expanding the scope of medication co-payments.
  • Establish public health budgets/funds to cover life-saving drugs.
  • Engage in more public-private risk-sharing agreements along the lines of outcome-based Managed Entry Agreements (MEAs).
  • Encourage the development and take-up of more private health insurance products to supplement NHI coverage.

“Clearly it will take time for these suggestions to be properly considered and put into effect,” says IRPMA Chief Operating Office Heather Lin. “But to meet our serious future challenges, it is important to start now to develop solutions. For the sake of a viable and sustainable healthcare system for the next generation, IRPMA and its member companies look forward to in-depth discussions with government authorities and all other stakeholders on how to move forward.”