Medical Devices: The NHIB has a problem with healthcare costs. Keeping foreigners out is not the solution.
Keeping Taiwan's human resources as strong as possible is obviously a top priority given the island's scant natural assets. But the government's approach to health care seems to actually inhibit the deployment of cutting-edge medical technology here.
Consider medical devices: Since the National Health Insurance Bureau (NHIB) was set up in 1995, fewer than five devices have been approved for use, says Linda Lin, chair of AmCham's Medical Devices Committee. The committee's impression is that the government is obsessed with capping health care expenditures; therefore, it puts far greater focus on cutting prices for products currently in use than on introducing new ones. The effect is to deny Taiwanese the best medical technology available. Lin, country manager for Becton Dickinson Worldwide, cites the case of an instrument that allows for earlier detection of breast cancer. The NHIB was wary of approving it since they couldn't figure out if it would cost the system too much.
It wasn't always this way. Before the NHIB was set up, says Lin, Taiwan was much more open to new technology than its neighbors such as Japan, South Korea, and Singapore. "Taiwan used to be the most modern country in terms of accepting new medical devices and pharmaceuticals," she says. "But when the NHIB started in 1995, controlling health care costs took precedence over introducing new technologies."
Ironically, the government's approach seems to ignore the fact that new devices can result in lower longer-term costs by allowing for earlier detection of diseases and for higher cure rates. It also ignores the impact of such an approach on foreign investment: Medical device companies can hardly be encouraged to expand in Taiwan when their new products are being barred.
Lin says the government is likely to transfer the responsibility for allocating budgets to hospitals, starting this year. A positive effect could be increased competition to attract patients: "The hospitals will want to differentiate themselves, so some might bring in the best technology in order to do this."
For her part, Lin would like to see the Executive Yuan influence the NHIB so that health care users pay higher premiums. The rates now are so low that they encourage overuse of the system, thereby becoming self-defeating by pushing up government subsidies. She would also like Taiwan to follow in the path of Japan where Amcham Japan works with the government and shows it "the total economic benefits" of introducing new health care products.
Such cooperation is hardly beyond government officials, she says: "It's not that they don't know how to do this, it's just not their focus right now." But it should receive quick attention. Taiwan not only wants to increase its visibility as a new WTO member, but it also wants to attract investment and technology to support its blossoming biotech industry. Cleaning up its health care system, and allowing more medical devices in, Lin says, is one way to show it is committed to pursuing these goals.