擴展健保視野：對比是否有國外居住經驗的臺灣人對臺灣健保的看法 - 政大學術集成

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(1)國立政治大學亞太研究英語碩士學位學程 International Master’s Program in Asia-Pacific Studies College of Social Sciences National Chengchi University 碩士論文 Master’s Thesis. 論文題目. Broadening Health Horizons: Exploring the Effects of Living Abroad on Perceptions of Taiwan's Healthcare. Student: Matthew Reinert Advisor: Don-yun Chen. 中華民國 104 年 1 月. 論文題目 i.

(2) Broadening Health Horizons: Exploring the Effects of Living Abroad on Perceptions of Taiwan's Healthcare 研究生：李明. Student: Matthew Reinert. 指導教授：陳敦源. Advisor: Don-yun Chen 國立政治大學. 亞太研究英語碩士學位學程碩士論文. A Thesis Submitted to International Master’s Program in Asia-Pacific Studies National Chengchi University In partial fulfillment of the Requirement For the degree of Master in China Studies 中華民國 104 年 1 月. ii.

(3) Authorized Page. iii.

(4) Authorized for Online Publication. iv.

(5) Acknowledgements First and foremost, I must thank Professor Don-yun Chen, without whose guidance, knowledge and infinite patience, this thesis could not have been completed. I must also thank Professor Chao-yin Lin for agreeing to be on my committee and taking time to be interviewed as well as allowing me to peruse her dissertation. Thanks also to Professor I-Chun Liu for agreeing to be on my committee and sitting in a noisy McDonald’s while being interviewed. I want to also thank Doctor Lee Mingliang for taking time out of his busy schedule to sit for an interview. His first-hand experience of policy making in healthcare reform was invaluable. Professor Shou-Hsia Cheng provided a wealth of insight and was nice enough to respond to an email out of the blue from a foreign grad student he didn’t know. I wouldn’t have been able to complete this without the help of Tai-yang Lin who helped me say what I needed to say in Chinese and went out of her way to put me in touch with friends and acquaintances who could be interview subjects. I want to thank all of my subjects who all took time out to listen to me speak halting Chinese or, taking pity on me, spoke in English, a language not their own. I must thank Wendy Fang for sitting patiently as we listened to Chinese recordings and helped me figure out what words someone had actually said. My mother, Debora Reinert, deserves thanks for helping with the formatting and being around when time was short. Most of all, I must thank Jasnea Sarma for always being on hand to edit or interview. Whether it was babysitting five children or drafting a language exchange, she did what needed to be done so I could get my interviews. .. v.

(6) Abstract The aim of this project was to formally examine how the experience of living abroad in the United States affects the perceptions of Taiwanese people towards Taiwan's National Health Insurance. The study interviewed seven Taiwanese laypeople who have lived solely in Taiwan as well as ten Taiwanese laypeople who have lived both in Taiwan and in the United States. Five Taiwanese healthcare policy experts were also interviewed. The interviews were guided interviews that assessed the subjects’ perspective with questions focusing on the quality and value of care, past experiences in Taiwan and the United States, expectations about healthcare, policy knowledge, and expert training. The study is intended to be a first step in the examination of influences on the perception of laypeople concerning healthcare, with the eventual goal of the design and implementation of methods to influence public policy toward healthcare support and funding in Taiwan. The study used a combination of grounded theory and guided research to determine the following: 1) People who have lived in the US do show a small change in their perceptions of the Taiwan system with regards to frequency of use and their perceptions of positive and negative attributes of the system. They also had different views on how to alleviate those negative attributes. 2) Living abroad does appear to bring the perception of laypeople closer to the perception of the experts when it comes to the problems of the Taiwan system, how to fix them, and the ideals that undergird the system. 3) Laypeople, both those who have and have not been to the US, know less about the system as a whole than the policy experts. This topic has wide ranging implications for policy design and public education. Policymakers would be well advised to use far more international comparisons when talking about policy to replicate the effect of direct experience abroad. There also needs to be more education about the current structure of the NHI as most of its beneficiaries are unclear about the cost of the program and who pays it. Keywords: Taiwan National Health Insurance, Perception, Quality of Care, United States, Direct Experience. vi.

(7) Table of Contents Acknowledgements .................................................................................................................... v Abstract ..................................................................................................................................... vi Table of Contents .....................................................................................................................vii Figures and Tables ................................................................................................................. viii 1. Introduction ...................................................................................................................... 1. 2. Research Questions .......................................................................................................... 3. 3. Literature Review ............................................................................................................. 6 3.1. Background .................................................................................................................. 6. 3.1. Theory ........................................................................................................................ 20. 4. Definitions ...................................................................................................................... 28. 5. Research Method ............................................................................................................ 30 5.1. Rationale .................................................................................................................... 30. 5.2. Methods ..................................................................................................................... 32. 5.3. Framework ................................................................................................................. 33. 5.4. Survey Design ............................................................................................................ 37. 5.5. Variables .................................................................................................................... 38. 5.6. Analysis ..................................................................................................................... 49. 6. Description of Sample and Responses ........................................................................... 53 6.1. Description of Sample ............................................................................................... 53. 6.2. Research Limitations ................................................................................................. 53. 6.3. Survey Responses (Scaled Data) ............................................................................... 56. 6.4. Knowledge Questions ................................................................................................ 66. 6.5. Qualitative Data ......................................................................................................... 68. 7. Analysis .......................................................................................................................... 75 7.1. Research Questions One and Two ............................................................................. 75. 7.2. Research Question Three ........................................................................................... 76. 7.3. Research Question Four ............................................................................................. 77. 8. Discussion and Conclusion............................................................................................. 78 8.1. Support of Claims ...................................................................................................... 78. 8.2. Commonality of Ideals .............................................................................................. 80. 8.3. Theoretical Framework .............................................................................................. 80. 8.4. Method ....................................................................................................................... 81. 8.5. Future Study............................................................................................................... 81. 8.6. Policy Implications .................................................................................................... 82. vii.

(8) Bibliography ............................................................................................................................ 83 Appendix 1 - Questionnaire ..................................................................................................... 90 Appendix 2: President Ma’s Policy positions (translated) ....................................................... 97. Figures and Tables. Figure 1. Initial Conceptual Framework .................................................................................. 34 Figure 2. Revised Conceptual Framework............................................................................... 36 Figure 3. Variables Elicited by Survey .................................................................................... 50. Table 1. Description of Sample Groups ................................................................................... 52 Table 2. Perceptions of Expected Cost of a Broken Arm in Taiwan ........................................ 56 Table 3. Perceptions of Expected Time to Treatment in Taiwan ............................................. 57 Table 4. Perception of Cost for Direct Experience in Taiwan.................................................. 58 Table 5. Perceptions of Time to Treatment for Direct Experience in Taiwan .......................... 60 Table 6. Perceptions of Frequency of Use in Taiwan and Personal Health Assessment .......... 62 Table 7. Perceptions of Quality and Convenience for Taiwan ................................................. 63 Table 8. Perceptions of Quality and Convenience for the United States ................................. 64 Table 9. Knowledge Questions and Answers ........................................................................... 65. viii.

(9) 1 Introduction Formulating national healthcare policy is seen as one of the core tasks of the modern industrialized state. Social insurance and health insurance systems were pioneered in the early 20th century by many countries, along with the adoption of the welfare state. According to the World Health Organization, a healthcare system has three goals: health, responsiveness and fair financing. The WHO states that there are four key work packages health systems have to perform in pursuit of these goals. They are: providing services; generating the human and physical resources that make service delivery possible; raising and pooling the resources used to pay for healthcare; and the function of stewardship - setting and enforcing the rules of the game and providing strategic direction for all the different actors involved.1 Unfortunately, healthcare systems are very complex, with high costs, higher stakes and policy risks that are hard to quantify. In a democratic system, all of these issues are ultimately decided by the voting public. Policy is generally written by experts, but it is dependent on the continued support of the lay citizenry. Thus, one of the largest problems when discussing and implementing healthcare policy is a disconnect in the thought process between lay people and experts. For example, policy experts spend years calculating the cost and benefits of different schemes, while the voter only sees the final policy and not the reasoning behind that policy's structure. Furthermore, it's difficult to safeguard successful policy if the public takes the policy for granted or even perceives it as a failure because the policy does not match their expectations. With dozens of comprehensive national healthcare systems in the world, each with its own structure and features, it is important to examine how ordinary people perceive these complex systems and where their perceptions differ and concur with those of policy experts. Researchers have been comparing and contrasting healthcare systems for decades, but does such expert level analysis filter down to the general public? A. 1. (“WHO | Health Systems Strengthening Glossary” 2007) 1.

(10) country may have very inexpensive care comparatively, yet its citizens still view the care as expensive. Conversely, a country may have some of the highest medical costs in the world, yet its citizens may think they are getting good value for the money2. This study focused on Taiwanese people living in Taiwan. Anecdotally, there has always been a reputation that Taiwanese voters take the NHI for granted. In US political science, the United States’s social insurance scheme for the elderly, known as Social Security, is often cited as the proverbial “third rail” which politicians fear to touch. In Taiwan, the third rail is Taiwan’s National Health Insurance. Taiwan’s health system is justly famous for routinely having an above 70% approval rating and globally superior health outcomes at a very low cost. Taiwan's system is frequently featured in articles talking about the “best healthcare systems” in the world. (The island’s contentious political status often prevents it from appearing in some officially sponsored academic research like the World Health Organization (WHO) report3.) However, the Taiwanese system still faces the same problems that bedevil health ministries around the globe. Costs are rising, the population is aging, and not enough doctors are being trained to meet future needs. Compared to much of the rest of the world, Taiwan's system has ample policy room to raise revenues without becoming a significant burden on the populace, yet Taiwanese politicians are afraid to do so. The fact that they fear to raise the premium or shift more burden to consumers seems puzzling. Do the voters of Taiwan realize how high quality their health system is? How cheap it is? How convenient it is? Especially when compared to the rest of the world? If not, would experience outside of the country cause them to reevaluate the way they look at Taiwan's system? My research sought to explore these questions further. This paper examines the issues by looking at how Taiwanese people in Taiwan and Taiwanese people who live or have lived in the United States view the healthcare system in Taiwan as well as examining layperson vs. expert perception to see if laypeople can be made to perceive the system in the same way that the experts do. If people do perceive a difference between different national healthcare systems, how do they perceive it? What are the aspects of the healthcare system that people focus on?. 2 3. (Herman, 2008) (World Health Statistics 2013, 2013) 2.

(11) Using in-depth interviews and grounded theory to examine these questions, this project probed for relationships and ways that layperson perception of healthcare is driven. It is hoped that these relationships can then point towards future research that can be done quantitatively on a much larger scale.. 2 Research Questions This research was exploratory, and it examined how expert knowledge, living abroad, and personal healthcare perceptions interrelate in order to make a framework that might better facilitate policy marketing. These relationships are important both for the formulation and the implementation of policy in a democratic system. Effective public policy depends on policymakers being able to convince the larger mass of voters that a given policy is necessary and likely to achieve its policy goals4. This is called policy marketing and it is a battleground where what people believe about a policy and the facts often don’t coincide5 In situations where the perceptions of the public differ starkly from policymakers, public policymakers face the additional hurdle of bringing the populace onto their side to pass the legislation. A state where the policy experts are unable to enlist the aid of the public is doomed to dysfunction even in situations where large majorities favor change.6 Additionally, the numerous health systems world-wide could be an inexhaustible source of public policy options. “Policy transfer” between nations has a long history with countries adopting successful ideas from abroad. Unfortunately, in many countries, the greater public is not aware of how other nations have solved similar problems with regards to the provision of healthcare. Sometimes this is the result of simple ignorance of the alternatives, though it can also be a result of policy outreach by those invested in an advantageous status quo. The need for the elites to lead the public is often taken as a given in the policy transfer literature; for example, in Dolowitz and Marsh’s Policy 4. (Organisation for Economic Co-operation and Development 2001 p.20). 5. (Bouzas-Lorenzo, 2010 p. 115) (Smith et al. 1992 p. 128). 6. 3.

(12) Transfer framework, the general public doesn’t appear as a “political actor.”7 A democratic state where the public does not take an international perspective finds its policy options limited because copying successful policies from other nations requires the additional step of raising the public's consciousness of said international alternatives. Without this awareness, the state is forced to reinvent the wheel or resort to undemocratic means to foist a healthcare policy upon a public who neither understands nor approves of it. The project thus needed an example where people had been forced to have direct experience with a radically different healthcare system in another country. This project shows how experience with the healthcare system of the United States affects how Taiwanese people view the NHI, This could then inform how the NHI disseminates information and reduce the legislative cost of enacting to reform. This research project sought to understand these dynamics by asking several research questions. 1) Does the experience of living abroad in the United States affect a Taiwanese layperson's perception of Taiwan's National Health Insurance (NHI)? Hypothesis 1: People who have cross cultural experience under a different healthcare system will have different perceptions than those who have lived only in Taiwan. This claim is based on a simple rationale grounded in consumer choice theory. Taiwan's NHI is very cheap compared to the US system, and access to healthcare is simple and straightforward in Taiwan. A person who has lived abroad in the US and interacted with the health system in that country will become aware of how expensive America is and, by comparison, how cheap Taiwan is. I expected this to change their perception of the value of the care provided by the Taiwan system as well as the quality of care. The rationale behind this is that people will form personal benchmarks about what care should cost and how much it's worth through their own direct experience. The experience of living abroad in a country with care that is of similar quality to the NHI, but vastly more expensive, is going to cause those internal benchmarks to change relative to what they would have been had they never left the country. This difference will show up when comparing laypeople who have lived abroad in the US vs. those who have not. This hypothesis was echoed by one of the health experts, C2, during the research, 7. (Dolowitz & Marsh, 2000 p. 10) 4.

(13) who said, “I see... Fortunately, most of the resident living in Taiwan, they are satisfied with the system right now. So we have a very high satisfaction rate, you must know that and if someone travel around the world and come back... they will appreciate more... So cheap and the service is quite acceptable and the quality... and so convenient, that's out of your imagination.”. 2) How does the experience of living abroad in the United States affect Taiwanese layperson perceptions of Taiwan's National Health Insurance (NHI)? Hypothesis 2: People who have abroad in the United States will perceive the Taiwan system as cheaper and faster than those who have lived only in Taiwan. If the answer to Question One shows a difference in perception, the next step is to find out how the perception differs between those who have lived in the United States and those who have not. Research on the background contrast effect has shown that the nature of the previous context can influence the direction of future choices.8 This research theorizes that perceptions are affected in a similar way.. 3) Do perceptions of the Taiwan healthcare system differ between laypeople and policy experts? Hypothesis 3: The perception of policy experts will differ from laypeople in consistent ways. Policy experts will see the Taiwanese system as cheaper and faster. Policy experts, as part of their professional training and regular experience, read about healthcare systems in other countries. In the course of their professional work, they will find that the NHI is very cheap by international standards and maintains a quality of care that compares favorably to other systems. This will augment their personal experience with the NHI and they will find it to be cheaper and more effective than a layperson would. This question is important because this research posits that policy experts have a clearer idea of what the NHI was meant to achieve, 8. (Simonson & Tversky, 1992 p. 284) 5.

(14) what it is doing objectively and how it compares internationally. If perceptions differ between those groups, then that represents an obstacle to effective policy making.. 4) Does living abroad in the United States bring the perceptions of laypeople closer to that of policy experts? Hypothesis 4: Living abroad will bring the perceptions of laypeople closer to that of policy experts. The framework for this research has both direct experience in other countries and expert knowledge as variables that drive the creation of perception. The hypothesis is that the effect of the expert knowledge of the policy experts is similar to the effect of the direct experience abroad of the laypeople.. 3 Literature Review 3.1 Background The spur for this research was the seeming disconnect between the quality of Taiwan's healthcare and the difficulty that the authorities have had in securing further funding for it. In order to understand the current situation in Taiwan and the way that the NHI interacts with Taiwanese people and its role in forming their perceptions, this study must first explore how and why the NHI was created. Many analysts have talked about the genesis of the Taiwan system. I have to thank Professor Chao Yin Lin for giving me access to the most detailed English source about the genesis of the Taiwan system that I encountered over the course of the project, The Policy Making Process for Taiwan's National Health Insurance Programme with Reference to Key Political Groups, 1985-1996 : A Case Study. Her book was invaluable for understanding the reasoning behind the creation of the NHI itself as well as the political process that governed its formation. The first chapter of the book is theoretical. It discusses the expansion of Taiwan's National Health Insurance (NHI) through the lenses of corporatism and pluralism as well as whether it was a top down or a bottom up sort of reform. Later on, she goes into the 6.

(15) background of social and health insurance in Taiwan and ties it back to the original founding of the Republic of China and the Three Principles of the people. The discussion of the norms of social insurance in this section was very interesting in the way it explained how the government doled out social insurance of various kinds to different interest groups and stake holders in order to maintain control. The gradual expansion of social insurance schemes on a somewhat mercenary basis was surprising given how much it came to be viewed later as a right. . She also talks about the creation of the NHI itself, quoting government officials and the original drafters who talk about the goal of the initial system which was to ensure affordable access and care for everyone. This founding idea was actually still cited twenty years later by the subjects in this study when asked what the ideal purpose of a national health insurance system should be. She talks about the expanded role of out-ofgovernment groups in the drafting of the legislation even though they weren’t supposed to be part of the policy process in the initial drafting of the NHI, and then links it to the history of social welfare within the Republic of China. She renews the discussion about whether the formation of the NHI was a process characterized by corporatism or pluralism, and the reader is left with the impression that the NHI was formed in a corporatist way, with outside pressure groups trying influence the process and somewhat succeeding in getting their voices heard. This is connected to the discussion of Taiwan's concurrent retreat from martial law and the increased access this gave disparate interest groups to the government. Another aspect of the NHI was not brought up in the book, but was brought up when Dr. Lin was interviewed for this study. She pointed out an example given by Professor Yang about how the NHI changed the Taiwanese culture. According to the example, before the NHI was passed, many TV dramas would use financial hardship due to medical bills as a central plot element. The characters would be forced “to sell everything. People had to sell their houses, they had to sell their daughters....[Professor Yang] wanted to show how important NHI is. He could say, “Now, you see? We never see any TV dramas like that after 1995. No one sells their daughters because of someone's illness. If really something happens, you always have NHI to back you up.” This anecdote also supports the use of the United States as a contrast to Taiwan, where an 7.

(16) incredibly popular and critically acclaimed show, “Breaking Bad,” was premised on father becoming a drug kingpin to pay for his medical bills. What is contemporary in America is now the distant past in Taiwan with Professor Lin pointing out that the current generation has little memory of the market conditions within healthcare before the NHI. In Joseph Wong's seminal book, Healthy Democracies,9 he actively opposes those who want to make a structuralist explanation of why Taiwan created the NHI system. He points out that a pure structuralist narrative suggests that an authoritarian developmentalist state like Taiwan would not be concerned with creating a universal health insurance. At the same time, he critiques the notion that Confucian values somehow preclude societies like Taiwan and Korea from shifting the burden of care away from the family and onto the State. He also challenges Marxist narratives where the inevitable clash of labor and capital force the State to adapt by extending social insurance. As to this last argument, he points out that in both Korea and Taiwan, Cold War politics had destroyed any sort of left-wing political force, yet it was the incumbent conservative majority parties that went ahead with the institution of universal healthcare. Rather than being a reaction to massive demand from below, he contends that the Taiwan system was a very top-down reform. His explanation for the change in government priorities rests on the impending democratization in both countries. In Taiwan, he says, the authoritarian KMT realized that its old sources of legitimacy had run their course. Wong posits that the reform was a rational policy response to future democratic challenges. Previous insurance schemes had been targeted towards KMT supporters like government workers and large enterprises. Once everyone could vote, it made sense to target social insurance to everybody and thus capture as many new supporters as possible. The party was united and it was a “gift” to the populace. Though he does not explore this concept in his book, this idea may have had an effect on the way healthcare was perceived later. This slightly disagrees with Lin's explanation of the creation of the NHI but that's mainly due to the Wong book lacking the same depth. According to Wong, there had been problems with the provision of healthcare before the early Nineties in Taiwan but none that led to a massive demand for reform. 9. (Wong 2006) 8.

(17) Interestingly, Wong also details the failure of the 1997 attempt to privatize the system. In that instance, civil society and the public did get involved to a great degree and the reform was killed. This suggests that, within a few years, the NHI had gone from being a non-issue to one that normal people placed a great deal of value on. Anna Tang's article, State, Politics, and National Health Insurance in Taiwan10 widely agrees with most of Wong's assessment. She also disputes structural functionalist narratives on the genesis of the Taiwan system. She echoes Wong's basic assessment that the creation of the NHI was prophylactic instead of a reaction to any specific electoral challenge. In addition, she takes a policy-centered approach and suggests that the NHI was continually moved forward as pre-existing pledges encountered present political difficulties. She points out the constitutional roots of the NHI going back to 1947 and details the gradual expansion of health and labor insurance to certain parts of society over the following decades. She suggests the final push in the late Eighties was a way for high ranking members of the KMT to shift away from a militarist narrative for legitimacy to one where they could be perceived as helping the basic members of society. For my research, the fact that the NHI was not instituted by popular demand or in response to a healthcare-related crisis suggests that the populace as a whole never experienced a large scale failure of the health system. When the NHI was instituted in Taiwan, healthcare had not become prohibitively expensive. This stands in contrast to the US, for example, where the Affordable Care Act was presaged by two decades of rapidly expanding healthcare costs. At the same time, the fact that the NHI has existed since the mid Nineties means that the reality of rising healthcare costs is perceived most acutely by providers and those managing the program while the public has remained insulated by the fixed premiums and copays11. Internationally, the Taiwan system has always been ranked highly by professional healthcare analysts. For example, the Economist Intelligence Unit12 notes its low cost relative to GDP, 6.6%, and Taiwan’s high life expectancy. In East Asia, only Hong Kong. 10. (Tang 1997). 11. (Okma, 2009 p 199) (“Side Effects: Challenges Facing Healthcare in Asia” 2010 p. 50). 12. 9.

(18) and Singapore enjoy longer life expectancies. A recent New York Times article lauded the system for its equity, price, and universal access.13 CNN ran a series that compared the healthcare systems of Taiwan, Switzerland, and Britain, and Taiwan came out very well, noted for both its low cost and ease of access.14 Taiwan’s GDP per capita with a PPP adjustment puts it firmly within the First World, ahead of countries like France and Japan.15 Compared to the OECD average of spending 10.6% of GDP on healthcare or the American 17.7%16, Taiwan's system at 6.6% is very inexpensive. The funding shortfall for the system is about one quarter (or it was before the most recent reform, though a deficit will almost certainly reappear as the rise in healthcare costs shows no sign of abatement).17 The professional literature tends to be unanimous that the system is inexpensive and has largely achieved its objectives of ensuring universal access to low cost care18 with a few common problems like a shortage of doctors and a tendency for rushed service.19,20 By 1998, the program was already running at a slight deficit and this was only expected to get worse as the working age population shrank and the elderly population swelled. In the year 2000, the ruling party switched from the KMT for the first time in Taiwan's history, and the new government set up what was called the Healthcare Examination Small Group (健保體檢小組). Its members included Andrew T. Huang, Shi Yao Tong, Lan Zhongfu and Yang Zhiliang21. They very quickly realized the need for comprehensive reform and, within a year, Minister of Health, Lee Mingliang and National Taiwan University professor, Lai Mei Shu, founded the Executive Yuan Second Generation Healthcare Task Force (二代健保規劃小組). The goal of this group was to research ways to comprehensively reform the NHI. Despite the fact that the NHI premium is comparatively low by international. 13 14 15 16 17 18 19 20 21. (Underwood 2009 web) (Zakaria 2012 TV show) (“World Economic Database” 2013 web) (“Organization for Economic Co Operation and Development Health Data 2013” 2013 web) (“Health Insurance Premium Set at 4.91 Percent: Cabinet” 2012 web) (Cheng 2003 p. 63-64) (Hoban 2013 web) (Cheng 2009 p. 1042) (Chen 2012 p. 5) 10.

(19) standards22, there has been massive public resistance to raising the premium to meet the shortfall. The first premium rise after the NHI’s formation happened in 2002. One of the things that the Task Force had recommended was raising the premium. That proposed rise in premiums sparked loud protests23 and, while the reform did eventually pass, the health minister, Lee Mingliang, resigned shortly afterwards, in a move that was often perceived as a way for him to absolve the government of responsibility for raising the premium.24 When interviewed for this study, Dr. Lee said that this perception is backwards. He states that he had pledged to serve in the Chen Shuibian administration for two years and had planned to leave the government by the end of the summer to return to teaching. In the 1995 National Health Insurance Act, the Health Minister has the right to raise the premium to 6.00% at his/her own discretion. Since he intended to leave in two months anyway and had no interest in a continuing political career, the usual political constraints imposed by voter fear of voter reprisal at the ballot box did not apply. Dr. Lee raised the premium, sparking massive protest and earning the nickname of “兩升” meaning “double raise.” Nevertheless, the popular perception of this story, that he was forced out and its implications, was chilling for many Taiwanese politicians. They feared that raising the premium would require the sacrifice of a health minister, one who perhaps wanted to continue in the position. In 2005, Lin, Chen, Liu and Hsiao wrote “Political Feasibility Analysis of the New Financing Scheme for the National Health Insurance Reform in Taiwan: An Application of Stakeholder Analysis.”25 This paper's goal was to assess the political feasibility of instituting the changes associated with the Second Generation of the NHI. As part of their method, they identified the “key policy players” involved with NHI policy. In their framework, they categorized these players by whether they were internal, players who were part of the government; external, players who were not part of the government; or intermediate, political party policy organs, professors and the press. Of the 52 key policy players identified, 24 were NGO's, employer associations, employee associations, medical groups and press organs. This stands in stark contrast to when the 22 23 24 25. (Okma, 2009 p. 199) (Chang 2002a web) ( Chang 2002b web) (Lin, Chen, Liu, & Hsiao, 2005) 11.

(20) NHI was founded, when many of these groups didn't even exist. Further in the analysis, they show how the different groups differ in their opinions on further reforms to the NHI, a problem that was minimal at its conception when the policy players were almost all internal to the government. In their analysis, Lin et al. found that the policy elites in the administrative sector and the legislative sector were the most supportive of the Second Generation initiative while employees’ associations and welfare NGOs showed the least support for the new scheme as a whole. Support from employers’ associations, medical groups, and intermediate groups was somewhere in between. They also found that the employees' associations didn't seem to like the new scheme in isolation but were very supportive of reform when compared to the then-current system. For this research, bringing layperson opinion closer to that of policy experts would probably cause the layperson-based groups like the employees’ association, to also have views closer to those of the government. The imperiled Chen administration eventually lost an election, and in 2008, the newly elected KMT president, Ma Ying-jeou, released his health blueprint. Of the ten policies listed, only one of them, #7, addressed the need to increase health funding. The rest were promises of efficiency, better medical outcomes and more subsidies.26 This was a bias towards cost-free administrative fixes over causing pain to voters. After his election, the government tried to implement the planned Second Generation of the NHI.27 Still, the issue of political feasibility was never far from the minds of those running the Department of Health. Yaung Chih-liang, the third health minister in two years, temporarily increased the premium rate to 5.17% of income until a final bill could be implemented. The goal was to make the increase permanent, but he was blocked not by the political opposition, but by members of his own party, who were trying to avoid being seen supporting a rate increase. Over the course of the discussion, he signaled his intention to resign and started to do so twice. When the final version of Second Generation Healthcare was passed in 2011, the government, instead of increasing premiums, lowered them from 5.17% to 4.91% of income. Both parties made pledges to hold the rates at 4.91% and held rallies and press conferences for that position. During. 26 27. (馬 and 蕭 2008 p. 3 See Appendix #) (Wang et al. 2010 web) 12.

(21) the debate after the final bill was announced, but not finalized, Department of Health adviser, Qu Tong-guang said, “If it must be 4.91%, then that will shrink the period that the NHI is at financial equilibrium. This is a persistent problem and everyone is looking to see if we hope for a better long term solution to towards financial stability, or for a small decrease in the premium rate.”28 Even though he was successful at shepherding through the reform, Yaung Chih-liang resigned for the third and final time.29 That said, the reform that took effect on January 1st, 2013 fell far short of the ambitious reforms that were tested for political feasibility in 2005, when Lin et al. asked for eight major changes to the NHI. These were: 1) The classification of the insured is eliminated. 2) The premiums are calculated according to taxable incomes. 3) The premiums are pre-deducted on the basis of a hypothetical contribution rate. 4) The representatives of insured persons collectively decide the scope of benefits and the level of premiums. 5) A top limit of the NHI premium is set. 6) A bottom limit of the NHI premium is set. 7) The contribution sharing of the government is based on a fix formula with parameters like the growth rates of GDP and medical expenditure. 8) The contribution sharing of employers is based on a certain percentage of personnel fees in firms.30 Looking at the Handbook of Taiwan's National Health Insurance. 2013-201431, it is striking how few of the ideas from that list were implemented. There are still categories of income, the income table still has a maximum that is about eight times more than the minimum rate, the employer contributions are still calculated the old way, etc. The only real change is the addition of premiums based on supplementary income, which was merely one of the original eight proposals promoted in the early 2000's. 28 29 30 31. (“藍綠籲二代健保費率降至 4.91% 衛署：尚未決定” 2012 web) (Hsu 2013 p. 1) (Lin, Chen, Liu, & Hsiao, 2005 p. 13) (Executive Yuan, Ministry of Health and Welfare, and National Health Insurance Administration 2013) 13.

(22) Taiwan is also facing several trends that will worsen the fiscal outlook for the NHI. It will face more problems in the future as the population ages. Wealthier people will likely demand more drugs, drugs that are themselves getting more expensive. This will be coupled with a rapid increase in the rate chronic disease and rising healthcare costs in general. The reduction in reimbursement rates is also putting price pressure on healthcare providers. There are other policies to address these issues, like the Long-Term Care Insurance Preparatory Task Force started in 2009, but these are not expected to be formally implemented for several years.32 Reading stories in the newspaper, it is clear that what is seen as either cheap or expensive from a Taiwanese point of view is different from the international consensus. For example, a Taipei Times article quoted a graduate student in Taiwan complaining that he had to pay more than 1,000 NTD (30 USD) to treat a knee injury as though this were a massive expense.33 That can be compared to the US where a similar surgery (with insurance) regularly runs into the hundreds if not thousands of US dollars (5,000 to over 30,000 NTD). Expense is related to expectation, and, in this case, the student felt that the Taiwanese charge was unreasonable, even though treatment for the same injury in the US would have been much more expensive. In the annual surveys that the NHI conducts to gauge the public's satisfaction with the system, expense is always the biggest reason for why some people are dissatisfied. That said, satisfaction remains very high at about 80%, but the largest drop in satisfaction came in 2002 after the premium was raised for the first time, when satisfaction dropped from 78.5% to 58.7% in one year.34 Apparently, politicians were unsuccessful in convincing the public of the necessity for the change. It appears that the political feasibility of policy change becomes constrained by the inability of policymakerss to raise the premium with public support. Anecdotally, Taiwanese citizens in the US perceive the difference between the NHI and the US system very clearly. At a recent symposium detailing the NHI to US audiences, a Taiwanese citizen explained why she paid the twenty-five dollars a month necessary to maintain her NHI even though she's lived in the US for nine years. “I’m 32 33 34. (Lin, Wong, and Ling 2012 p. 17) (“Chinese Students Favor NHI Inclusion Plan” 2013 web) (“National Health Insurance in Taiwan 2012-2013 Annual Report” 2012 p. 42) 14.

(23) afraid of the US healthcare system. If I need it, I can go home and have things taken care of that way.35” International comparisons generally put the United States near the bottom on every metric but expense. For example, a study by the Commonwealth Fund in 2004 wrote, “On five of the six domains of quality of care included in the Institute of Medicine framework, the US performs relatively poorly from the patients’ perspective. Timelines was the only measure on which the US system performed better than the four other countries.”36 Compared to the United States, the health expenditures in Taiwan cheaper for the country as a whole (2,207$ vs. 7,950 USD$ per patient PPP adjusted). It's also far cheaper in terms of direct payments by consumers, with most medical premiums and copayments being only a few US dollars.37 That does not imply that the Taiwan system is always better. Hsiou and Pylypchuk, for example, showed that Taiwanese people are far less likely to use preventative care than their US counterparts despite it being cheaper in Taiwan.38 During my research, every time that I asked a Taiwanese person who has been to the US about the NHI, they've been very laudatory of the Taiwan system. The experience of living abroad might have changed their perception. This research is an academic focus on the nature of that perception change. Interestingly enough, a possible use for this research is suggested by a similar phenomenon in the United States. By way of explanation, the United States has had debates about how healthcare in the US should be structured for decades. However, for the purposes of future use of this research and how perceptions can drive public policy, it's important to talk about how the healthcare debate is handled in America. In the US, international statistics are often used to shift the healthcare debate. This can be in the newspaper with headlines like “While the US Spends Heavily on Healthcare, a Study Faults the Quality”39 from the New York Times but it can also spill out to other forms of media. The documentary, Sicko, by Michael Moore, explicitly and 35 36 37 38 39. (Hoban 2013 web) (Davis et al. 2004 p. x) (Gao 2012 web) (Hsiou and Pylypchuk 2012 p. 790) (Abelson 2008) 15.

(24) unfavorably compared the healthcare system of the US to Canada, the UK, and Cuba. The movie was a moderate success, making almost three times its small budget, and it sparked a national conversation. However, it didn't make as much difference in public opinion as some of Michael Moore's other movies. The reason why can be found in a book called Deadly Spin by Wendell Potter. Potter was the Head of Corporate Communications at the US health insurer CIGNA. His job was Public Relations, a job which he defines in the book as “the management function that establishes and maintains a mutually beneficial relationship between an organization and the public on whom its success or failure depends40” In practice, his job was to make sure that Americans didn't develop opinions that could be harmful to his parent company. In the second chapter of the book, Potter talks about how the campaign to blunt the impact of the movie, Sicko, in the United States was carried out. Even though all of the health insurers in the states are competitors, they do have common interests and common worries about a “hostile” regulatory environment. America's Health Insurance Plans (AHIP) is the trade group representing the health insurers and serves as a coordinator for advocacy in the pluralistic American system. The AHIP was the active leader of the campaign against the movie and coordinated with individual companies. The campaign was long term, well-funded, and largely successful. For the purpose of this thesis, it's important to note how the campaign to influence public opinion was carried out. Potter attended a conference where an AHIP representative showed through polling that public opinion had been moving towards wanting more government intervention in the healthcare marketplace; significant percentages were even advocating for a single payer system like Taiwan or Canada had. They feared that the movie, which showed how poorly the US did on many healthcare measures, could push public opinion far enough to influence legislation. The plan to counter this trend was simple and given at a single briefing which was not recorded or written down for fear of the meeting being discovered. The strategy was well organized. First, all of the companies' PR departments would go look for positive stories of private insurers helping people and actively place them in the media, but 40. (Potter 2010 p. 46) 16.

(25) without having the media realize they were purposely planted. Second, they should always acknowledge the compelling stories of personal suffering in the movie, but very quickly reframe the insurers as actively working towards the solution. Third, they should recruit ideologically similar think tanks to attack the opponent's (in this case Michael Moore's) credibility. As part of this discrediting strategy, the insurance industry founded a group called Healthcare America which was created “for the sole purpose of talking about the shortcomings of government run systems.” The strategy was carried out on a massive scale across multiple companies. PR chiefs and company managers were given binders with a rundown of all the questions a reporter might ask and what to say to answer. Relevant to this thesis is that all of these binders came with pages of statistics saying negative things about non-US health systems that were government-run. One of the main thrusts was always to make the case that the private insurers were just victims of external forces that they deplored, just as they were sad about the poor patients whose coverage they refuse. They want people in the US to not be able to notice or even conceive of other countries which do it better. The campaign was successful, the movie did only moderately well, and no substantial changes resulted. They can also run campaigns to prevent changes relating to objective events. In a later anecdote relating to the death of Nataline Sarkisyan due to her insurance refusing to cover a liver transplant, Potter talks about how his employer, CIGNA, responded. The plan was ready for review ten days after the death. The strategy was similar to the earlier one against Sicko in that it relied on the ability to place favorable stories with sympathetic reporters, producers, and editors. These “third parties” would defend the company, so the company didn't have to. The message that they gave to these third parties is what's interesting. According to Potter, “the point was to disabuse the media, politicians, and the public of the notion that Nataline would have gotten the transplant if she had lived in Canada or France or England or any other developed country.”41 Potter, in his book, tells us that he was just one man working for one for-profit insurance company, but that his colleagues within the company and at other insurers have the same jobs and the same responsibilities. The importance of discrediting international 41. (Potter, 2010 p. 166) 17.

(26) comparisons and keeping the narrative US focused is listed as one of the key obligations of his job as PR representative. This is a job that has existed for decades and thus far, US insurers have found it profitable to pay tens of millions of dollars on employees, think tanks, and campaigns which try to prevent Americans from making international comparisons. This suggests that international comparisons do affect how people view their own healthcare. A first-hand example of this phenomenon came up when doing research on the Canadian system for this thesis. There was an article in the Daily Caller, a well-known news aggregator site known for its conservative slant. The article was titled, Report: Tens of thousands fled socialized Canadian medicine in 201342 . The article quoted that 41,838 Canadians traveled abroad to seek medical care outside of Canada in the year 2013. The article cited research done by the Fraser Institute and quoted Nadeem Ismail, director of health policy studies at the Fraser Institute, as saying, “Canadians may leave for a number of reasons including a lack of available resources or appropriate technology, a desire to return more quickly to their lives, to seek out superior quality care, or perhaps to save their own lives or avoid the risk of disability... That a considerable number of Canadians traveled and paid to escape the well-known failings of the Canadian healthcare system speaks volumes about how well the system is working for them.” This was clearly a report that pointed out problems with the Canadian healthcare system. In the opinion of their director of research, the 41,838 Canadian medical tourists meant that the Canadian system must work poorly. The original report43 that this was based on was published by the Fraser Institute and it was a record of findings, not the full report. The report started like this: “Faced with waits for treatment that are often months long (sometimes stretching over a year), it should come as little surprise that many Canadians ultimately choose to be medical tourists. The question of course, is how many? While data on exactly how many patients seek treatment abroad are not readily available, it is possible to estimate this number using data from the Fraser. 42 43. (Bastasch 2014 web) (Barua and Esmail 2013 web) 18.

(27) Institute’s annual waiting list survey and from the Canadian Institute for Health Information.44” The emphasis is mine. The goal of this report is apparently to find out how many Canadians become medical tourists every year, i.e. people who travel abroad for the express purpose of seeking medical care. Later on, though, when this report talks about the actual methodology, it becomes apparent that the method they used does not answer this question. According to the report, The Fraser Institute’s annual waiting list survey asks physicians in 12 major medical specialties what percentage of their patients received non-emergency medical treatment outside Canada in the past year. In 2013, averaged across all medical specialties, almost one per cent of patients in Canada were estimated to have done so, the same as in 2012.45 This does not fit. A person who receives non-emergency medical care abroad is not automatically a medical tourist. If a Canadian tourist leaves Canada to see the Eiffel Tower, gets a cold, and sees a doctor in Paris, that person did not do so because they found the Canadian healthcare system lacking. They left Canada for other reasons and happened to receive non-emergency care while out of the country. According to this summary, there didn't seem to be a way for this survey to distinguish between patients who left Canada for the express purpose of seeking medical care and people who left Canada for other reasons and happened to receive medical care abroad. Just to make sure, I found the full report that the Fraser Institute sent to doctors. The questionnaire only asked about what percentage of the responding doctors' patients had received non-emergency treatment abroad.46 There is a difference between the actual questionnaire's content and conclusions that the think tank officially drew from it. The statements by Nadeem Ismail suggest that publishing statistics designed to make the Canadian system look bad was the entire point of the study. This think tank is funded to the tune of millions of dollars a year. This suggests that these sorts of misleading international statistics actually have an effect on public opinion. They are hoping that spurious statistics about how bad the Canadian system is 44 45 46. (Barua and Esmail 2013 web) (Barua and Esmail 2013 web) (Barua and Esmail, 2013 p. 88) 19.

(28) will make Americans like their own private system more and resist calls to bring in more government administration. If fake international statistics from Canada can affect how Americans view their own health system, maybe real international statistics from America can change public opinion in Taiwan. Such a theory could also be applicable in the reverse direction. Similar mechanisms might be working in those countries that have a low quality or high expense in their care but remain more or less content. It would not only be useful for those seeking to get citizens to value a good system but also be valuable for those who want to generate public support for fixing a bad system.. 3.1 Theory The effect that I am looking for in this thesis is essentially a policy level version of Background Contrast Effect and how it affects perception. Background Contrast Effect is a concept most often seen in marketing research. It is an extension of consumer choice theory and was first coined by Itamar Simonsen and Itavar Tversky.47 They were studying the behavior of consumers with relation to marketed products. In their research, they used coupons, computers, cameras and tires as hypothetical goods which research subjects could choose between. Their method consisted of giving the subjects a choice between products (the background set) and then having them make a second choice among a new set of similar products. They varied the background sets between the experimental groups, and they found that the background set had a significant predictive power on the subsequent choice. Furthermore, they showed that the power of this background effect is still there with only a single choice in the background set. Taiwanese citizens are consumers of healthcare and they form perceptions of it. This research isn’t saying that consumer choice theory is necessarily applicable or that a background contrast effect is present. Instead, I theorize that something similar is happening, and that “something similar” to a background contrast effect in relation to policy perceptions is important.. 47. (Simonson & Tversky, 1992) 20.

(29) For this research, it is very important to talk about the meaning of perception. Fortunately, there has been an immense amount of work over the last decade in this area, and scholars have worked to evaluate different studies and methodologies. In the 1980's, healthcare perception as something separate from satisfaction was not widely considered. Measurements of healthcare perception were generally done as part of measurements of healthcare satisfaction. Instruments such as the Service Evaluation Questionnaire have desirable characteristics like uniformity and ease of use but they tend to hide negative experiences.48 As survey instruments and methodology improved (for example, the development of the Evaluation Ranking Scale), reported satisfaction generally diminished.49 Governments and scholars use many of these surveys to formulate official policy and assess public opinion. While these have continued to get more accurate, they don't always reflect a person's direct experiences. The Meaning of Healthcare Satisfaction: an Explanation of High Reported Levels, Brian Williams et al.50 is one of many studies that tried to move beyond patient satisfaction to examine actual patient experience. Williams was assessing the experience of patients in the British mental health system. According to his research, the way satisfaction has traditionally been conceptualized is misleading. Patients might report a high level of satisfaction while at the same time reporting a wide variety of negative experiences. This suggests that satisfaction surveys, such as those conducted by the NHI every year, are a misleading indicator of patient experience. Thus, relying on them as a basis for preserving or altering policy outcomes is risky since they are not necessarily reflections of the actual experiences of patients. One of the things that Williams suggests is that the possible determinant of satisfaction is expectations. A patient who had a bad experience, but had the health system work as they expected it would, might still be satisfied. Dissatisfaction arises largely when they see some part of the system not fulfilling its expected responsibilities. This was interesting because the same effect might be at play for why Taiwanese people and Americans are both largely satisfied with their respective healthcare despite the vast difference in cost and accessibility. Extrapolating from Williams's research to my 48 49 50. (Nguyen, Attkisson, and Stegner 1983 p 312.) (Pascoe and Attkisson 1983 p. 335) (Williams, Coyle, and Healy 1998) 21.

(30) research, it seems possible that it is the change in expectations, not the change in actual services, which determines how people perceive their healthcare. Americans are not dissatisfied with expensive care or lack of access in the American system because that's what experience has taught them to expect. Similarly, Taiwanese people might see any attempts to raise their premium as a broken contract, since gradually rising premiums are not what people have been conditioned to expect. In The Measurement of Satisfaction with Healthcare: Implications for Practice from a Systematic Review of the Literature51, the authors evaluated over 3,000 articles about ways of measuring satisfaction and eventually narrowed them down to a few hundred articles. Based on those studies, they were able to make some generalizations about the problems with healthcare satisfaction as a metric. Several of the problems were methodological, for example, measures of satisfaction tend to omit high risk groups like the old or the sick. Low response rates have a tendency to introduce systemic bias. They found further problems with the use of satisfaction because only 20% of the surveyed articles assessed expectations as well as satisfaction. Broadly, this review had two main conclusions: satisfaction does not mean superior service, only adequate or acceptable service; and satisfaction is a relative concept, what satisfies one person may dissatisfy another. For my research, both of those conclusions are important. The fact that satisfaction is relative and based on expectations of what's acceptable is important for how people perceive their healthcare systems, especially if a move to another country has altered their expectations. This is part of why this study didn't use satisfaction as a metric. With relationship to Taiwan, the NHI every year gives out the “National Insurance Satisfaction Survey.” (全民健康保險滿意度調查). In 1998,52 for example, this survey was given to four different groups: the Joint service centers in Southern Taiwan, the general public, insurance units, and medical providers. Strangely enough, all of the surveys, with the exception of the one for the general public, specifically ask for expectations as well as satisfaction. While it is important that the NHI has a method for assessing the role of expectations in determining satisfaction, the fact that the actual 51. (Crow et al. 2002). 52. (張 1988) 22.

(31) consumers of healthcare are not polled about their expectations is likely to leave a blind spot in public policy. Additional important research was done by the team of Shou-Hsia Cheng, YuJung Wei, and Hong Jen Chang. In Quality Competition and Perceived Expensiveness on Healthcare Consumers,53 they wanted to find out how perceived quality and expensiveness of hospitals affected consumers in Taiwan. They designed a survey focusing on patients who were in the hospital for stroke, diabetes, asthma and pneumonia. The survey measured perceived expensiveness, actual out-of-pocket costs, perceived quality of care, and whether they'd recommend the hospital. Interestingly enough, they discovered that perceived expensiveness was determined by the quality of care and the actual out-of-pocket cost. They posited that “perceived expensiveness” was the intervening variable between the actual out-of-pocket costs and the propensity to recommend the hospital. Furthermore, they noticed that perceived expensiveness was negatively associated with whether a patient would recommend the hospital, but that the actual out-of-pocket cost was not. Cheng, Wei, & Chang’s findings, that it is the cost and the quality together which determine the perceived expensiveness, provide a possible mechanism for the results of my study. In the US, Taiwanese respondents were dealing with a similar quality of care to the NHI but at a far higher out-of-pocket cost. My study suggests that living abroad in the US affects the intervening variable of perceived expensiveness. Put simply, a Taiwanese person who has lived in the United States is more likely to consider the given cost of both premiums and direct medical care available in Taiwan as “cheap.” For the purposes of this study, it is very important to talk about perception over satisfaction. This thesis is laying the groundwork for larger research in the future, but such a study would be contingent on having some idea of what drives the perceptions of value and cost. With regards to this question, we are within Kaplan's54 “context of discovery,” so this research needs to be open- ended. The separation between satisfaction, perception, and experience was enumerated. 53 54. (Cheng, Wei, & Chang, 2006) (Kaplan 1998 p. 308) 23.

(32) by Sofaer and Firminger55 In their review of several (mostly American) studies, they found that healthcare perceptions were more complex than just satisfaction. From the studies they evaluated, they pointed out several problems with the existing methodology. Expectations and experiences are often confounded and consumers are often aware of it. A person finds knowing how long someone actually waited to see the doctor a more relevant metric than whether that same patient was satisfied with the wait time. Their model for perception goes as follows, “In this model, patient perceptions of quality are in response to their experiences, whether a single episode of care or a number of episodes over time. These perceptions result from the interaction of the patient’s expectations and their experiences. Then, as patients apply their own definitions and/or criteria regarding quality, their perceptions of the quality of the care they received crystallize. It is important, however, to recognize that these definitions or criteria are rarely if ever consciously articulated or named by the individual. They are typically implicit rather than explicit.” My research is aimed at bringing these implicit definitions and criteria to light so they can be examined more robustly with a later study. Many of the studies they evaluated are part and parcel of what's called “Benchmarking.” There are several definitions of benchmarking but it can be defined as “a process of comparison between the performance characteristics of separate, often competing organisations intended to enable each participant to improve its own performance in the marketplace.”56 This is an approach that is often mandated by government agencies and used by policy researchers to improve the effectiveness of healthcare systems. Internal benchmarking is the comparison and two-way communication within an organization of performance indicators. This is done within the NHI itself as well as within providers and organizations. External benchmarking requires a comparison of external organizations in order to discover new ideas, methods, products and services.57 Benchmarking is performed because comparison within an organization or with 55 56 57. (Sofaer and Firminger 2005 p. 520) (Kay 2007 p. 22) (Cox and Thompson 1998 p. 3) 24.

(33) organizations outside allows the organization to objectively assess its own performance as well as giving an idea of what more could be achieved. Measures of healthcare satisfaction, assessments of clinical outcomes, international cost comparisons are all part of this process. Healthcare policy experts, as part of their professional careers, would be expected to encounter such benchmarking studies. Benchmarking is traditionally done on an organizational level, but there is a concept from marketing called “reference price,” that outlines how this could happen unconsciously on an individual level. The literature on this is extensive and is generally concerned with selling specific retail goods; however, it may play a role in how people perceive the value of their healthcare systems. It is defined by Mayhew and Winer as “The final price construct is the internal reference price, the price the consumer expects to encounter for the brand or thinks is normal or fair for that brand.” 58 This idea is used in marketing and it has several aspects. One of the most important is that for a consumer to buy a product, that product can't be more expensive than the consumer’s internal reference price. While the NHI itself is insurance provided by a public organization (the Bureau of National Health Insurance), it is likely that people in Taiwan view it like a product. The fact that it has existed for twenty years with very cheap premiums has arguably caused the internal reference price of Taiwanese consumers to be very, very low. Rajendran and Tellis59 suggested that “contextual reference price” i.e. the price that consumers form based on comparison with similar products at the same point of sale, is very influential in changing the internal reference price. With healthcare, people don't just spend money, they also spend time. While reference price in the literature is monetary, a similar process could be at work with regards to the frequency of visiting the doctor, or the wait time. Price is not the same thing as value, but this idea is interesting when considering the willingness of people to pay more for healthcare. National health insurance systems fall into a trap because consumers rarely live abroad and reset their reference price. Policy experts who by default take the international perspective often encounter contextual prices in their research and thus are likely to have an internal reference price. 58 59. (Mayhew and Winer 1992 p. 64) (Rajendran and Tellis 1994 p. 22) 25.

(34) set relative to international standards. While this research won't hinge on the precise behavioral mechanisms that people use to form their perceptions of healthcare, it is important to note that this could be a possible mechanism. Kahneman et. al. in Economic Preferences or Attitude Expressions?: An Analysis of Dollar Responses to Public Issues, explore the interaction between preferences and attitudes and the way subjects respond to questions designed to put dollar values on the public's willingness to pay. They examine the problems that arise from the contingent valuation model and make the point that the “stated willingness to pay” that comes from these questionnaires is best interpreted as expressions of attitudes, not actual economic expressions. They also go into depth about the limits and biases that arise from the use of monetary scales and the discrepancies between bounded categorical scales and monetary ones. One of the most important points is that monetary scales and bounded categorical scales are very strongly correlated but that the scope of monetary answers is not consistent from person to person. Another important point is labeled 4-1, where they say, “An object that is considered in isolation evokes a comparison set of similar objects. The valuation of the object is relative to the set that it evoked. Features that are common to the evoked set play no role in relative judgments and valuations.”. 60. Essentially, when asked whether a cake is big, a person compares it to other cakes. If asked whether a car is big, a person compares it to other cars. However, if asked whether a car or a cake is big at the same time, the internal valuation of what “big” means is altered by putting the two unlike things in the same comparison. They mentioned how this applies to stated willingness to pay when dealing with public policy issues in isolation or together. Methodologically, they explained in detail about the use of monetary scales. Essentially, a monetary scale is an unlimited magnitude scale with a lower bound at zero and no modulus. This makes the scales vary a great deal between individuals. However, they did notice that monetary answers did follow the answers given on categorical scales. This is important for my research because it was crucial that I explored what is expensive 60. (Kahneman et al. 2000 p. 217) 26.

(35) as a perception and then elicited what that means to the respondent in dollar terms. Altering any of these mechanisms could potentially make it easier for policymakerss in Taiwan improve the NHI. David Webber’s paper details the importance of analyzing political feasibility at each of six stages in the Policy cycle.61 The government in Taiwan has historically been very good at agenda setting, policy formulation, policy legitimation, and policy implementation. The problems for the NHI come at the evaluation and revision phases where the public's strong preference for the status quo impedes the ability of policymakerss to raise premiums. That said, this paper is not concerned with policy revision legitimacy at this stage. Whether or not it is possible will depend on whether the difference in perceptions even exists in the first place. For the methodology, it is important to peruse past research. I am using a Grounded Theory approach as a foundation. Grounded Theory, according to Corbin and Strauss, is useful for measuring small sample sizes and exploring thoughts and perceptions. This thesis relies on the subjects to illuminate their own perception on healthcare in depth. Because of this, a qualitative research method, based on grounded theories and semi-structured interviews is the best approach.62 This variety of interview generally elicits a wealth of detail as it gives an open forum for subjects to tell their own stories and generate different perspectives. It has been used very successfully in the past by other researchers looking at the quality of care in Britain,63 at perceptions about the cost and quality of primary care in America,64,65 the quality of nursing care for oncology patients in America66, nursing care in Australia,67 and several others. This method then lays the groundwork for further quantitative study. For instance, Radwin's qualitative study based on grounded theory and in depth interviews was later used to develop the Oncology Patients' Perceptions of the Quality of Nursing Care Scale (OPPQNCS) in 2003.68 Grounded theory is also good for this type of research because it is iterative and 61 62 63 64 65 66 67 68. (Webber 1986) (Corbin and Strauss 2008) (Attree 2001) (Concato and Feinstein 1997) (Gerteis and Picker 2002) (Radwin 2000) (Irurita 1999) (Radwin, Alster, and Rubin 2003) 27.

(36) ongoing. As I did the interviews, new ideas were revealed and new patterns and concepts emerged. “A key feature of grounded theory is not that hypotheses remain unverified, but that hypotheses (whether involving qualitative or quantitative data) are constantly revised during the research until they hold true for all of the evidence concerning the phenomena under study, as gathered in repeated interviews, observations or documents.”69 During this study, questions were revised and removed or added to address newly revealed information. The conceptual framework became smaller and more streamlined. Another issue that is important for a study that relies on past experience is to minimize recall bias. An example of recall bias is given in “Recall Bias in Epidemiological Studies” describing a study of women: “The percentage of women who correctly recalled within a year their age at menarche, age of natural or surgical menopause, and age at first use of oral contraceptives ranged from 75 to 90%. The percentage who correctly recalled their menstrual cycle length within one day, however, ranged from 0 to 60%.”70 In my survey, I found that when dealing with past experiences, although the cutoff for living in the United States was within the last ten years, many people couldn't remember certain information, and the survey was altered to remove the questions which caused the most difficulty. This is detailed in the Variables section.. 4 Definitions Several terms will be used in this research. Healthcare system – This research will use the more general definition favored by the World Health Organization. “A health system consists of all organizations, people and actions whose primary intent is to promote, restore or maintain health. This includes efforts to influence determinants of health as well as more direct health-improving 69 70. ((Corbin & Strauss, 1990 p. 11)) (Coughlin 1990 p. 88) 28.