President Lai Ching-Te recently pointed out that the health insurance payment system should shift from “fee-for-service” to “value-based payment,” further promoting a “capitation” system where medical institutions receive a fixed payment based on the number of service recipients, and are responsible for holistic care. Overcoming challenges in medical culture, resource allocation, system design, and implementation is essential. The transition requires refining the family physician system, designing risk and performance mechanisms, establishing medical information systems and collaboration networks, and addressing labor shortages, gradually building a sustainable, high-quality national healthcare system in Taiwan.

(For Hong Tzu-Jen's Column) Doctor and Patient

The capitation system under health insurance faces challenges in resources and implementation, but expanding it would be a significant step towards sustainability. Shutterstock

The so-called “capitation” refers to the government paying a fixed fee to medical institutions based on the number of service recipients, who are responsible for holistic care, encouraging preventive medicine and health management, and reducing unnecessary medical usage. This is entirely different from the current “fee-for-service” system, where payment corresponds to the number of consultations and tests performed. This system has been in place in the UK for many years, where family doctors receive compensation based on the number of patients, and can also earn a “quality bonus” for providing high-quality care, further enhancing chronic disease management and disease prevention.

In recent years, the Health Insurance Bureau has piloted a holistic care program in Xiulin, Hualien, using capitation, integrating primary clinics with Tzu Chi Hospital, focusing on early diagnosis and integrated care. The initial results of this pilot program have been positive, and if expanded in the future, it will be a significant step towards a sustainable health insurance system. However, transitioning the system is no easy task and must overcome multiple challenges in culture, resources, and implementation.

System and Resource Allocation Needs Improvement

Firstly, promoting capitation requires a change in medical culture. For many years, people have been accustomed to seeking medical attention freely, and medical institutions are used to charging per service. Successful transition requires changing the behavior patterns of doctors and patients, shifting focus from treatment to prevention, and establishing a stable “family doctor system” so that everyone has a constant guardian of their health.

Secondly, the design of the system must be robust. Poorly designed capitation may lead to doctors only registering patients without providing services, or primary clinics being unable to sustain operations due to financial pressure. Therefore, risk adjustment and performance incentive mechanisms are indispensable, with fees weighted according to risk factors such as age and health status, along with the establishment of care quality indicators to maintain fairness and quality of care.

Thirdly, resource allocation needs to consider regional differences. For instance, in regions like Hualian and Taitung, although there are many primary clinics, transferring patients to major hospitals is far and with few options. Without a good referral system, patients may face treatment delays. Furthermore, uneven resource distribution may prevent underprivileged areas from enjoying equal care, so regulatory measures should be set up to ensure fair resource distribution.

Based on local conditions and international experience, the author proposes the following four implementation suggestions:
1. Gradual pilot program: Begin with groups with simple medical needs and predictable behavior, such as long-term care residents and dialysis patients, and gradually expand to entire communities or regions.
2. Improve the family physician system: Establish a stable and high-trust primary care system as the first line for health management and referral.
3. Design risk and performance mechanisms: Avoid capitation evolving into cost pressure or reduction of medical services, ensuring that public rights are not compromised.
4. Establish medical information systems and collaboration networks: Medical institutions at all levels need to build data sharing and referral collaboration mechanisms to support integrated holistic care.

Moreover, health insurance reform will be difficult to implement without sufficient manpower support. Long-standing shortages in nursing manpower suggest the government should promote a “Nursing Scholarship Program,” providing financial assistance to students enrolling in nursing programs and linking this to a requirement to work in clinical practice for a number of years equal to those supported by the scholarship to supplement the nursing shortage.

“Capitation” is a policy direction worth pursuing, but truly achieving a transformation in healthcare requires meticulous system design, the implementation of medical network cooperation, changes in public behavior, and reasonable financial and medical workforce support. Starting from pilot programs and progressing gradually is the path to building a sustainable, high-quality national healthcare system in Taiwan.