Interview with CEO Taiwan Task Force on Medical Travel

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Background:
Dr. Ming-Yen Wu, along with the titles above, is also the Secretary General for Medical & Pharmaceutical Association of Taiwan Investors since 2001.  Dr. Wu holds a DDS degree and a MPH from the School of Public Health, UCLA in the USA.

Dr. Wu has also been a Director of the Healthcare Quality Association and Director of the Office for the Hospital Global Budget Executive Committee for the Taiwan Hospital Association.

Interview with Dr. Ming-Yen Wu
Secretary-General, Taiwan Non-Governmental Hospital & Clinics Association
Assistant Professor, Chang-Gung University
CEO Taiwan Task Force on Medical Travel

30 May, 2008
Sheraton Taipei Hotel, Executive Lounge 19th Floor.
Taipei, Taiwan

Disclaimer:

Hank Kearney was a guest of, and speaker at, the World Wide Health 2008 Conference, organized by the Taiwan Task Force on Medical Travel.

 

Interview:
Hank Kearney (HK): Good morning Dr. Wu.  Thank you for agreeing to meet with me. I know our readers will be keen to learn of the opportunities here in Taiwan and North Asia.

 

Dr. Min-Yen Wu (Dr. Wu): Thank you and good morning.

 

HK: Dr. Wu, can you provide our readers with some background on Taiwan’s healthcare market.  For instance, we know Taiwan’s total healthcare spend is about 6% of GDP.  This is a relatively small amount for a country like Taiwan.  Also, can we learn of the various payment schemes in place.

 

Dr. Wu: Certainly.  Yes, Taiwan’s highly efficient healthcare market absorbs 6% of our GDP.  This is because we have a relatively large private sector.  And we have a large private sector (particularly hospitals) even though our National Health Insurance (NHI) Fund makes no distinction between state and private hospitals.

 

HK: Has this market mix impacted hospital growth?

 

Dr. Wu: Yes, but perhaps not how it would be viewed in other regions.  The total number of hospitals has decreased over time.  We believe there are cultural forces at play here in that we as a society are more vested in large hospitals.  This is true here in Taiwan and on the mainland.  And our NHI does treat these hospitals differently in terms of reimbursement.

 

HK: I’m sorry.  I thought you mentioned the NHI does not distinguish between hospitals.

 

Dr. Wu: Yes, the NHI does not distinguish between state and private hospitals, but they do have different reimbursement schemes depending on the size of the hospital.  For instance, we have 4 categories of hospital:

           500+ beds are known as  medical centers.  This is the fastest growing type.

           250-500 beds are known as regional hospitals.

           Less than 250 beds are district hospitals, and

           Less than 9 beds are classified as clinics.

 

HK: For investors looking to develop new hospitals I can imagine the regulatory process is fairly involved.

 

Dr. Wu: Yes. Essentially, the urban areas have their full quota of hospitals.  All new hospital development can be approved outside the urban areas.

 

HK: Can you explain a bit about how these facilities and healthcare in general, deal with the investment community and how they expand.

 

Dr. Wu: A full 50% of all private healthcare facilities and hospitals have as their main investors the large, industrial groups unique to Taiwan.  For example, the largest nonprofit hospital chain, Chang-Gung Memorial Hospital, is a subsidiary of the largest industrial group, Formosa Plastics Group in Taiwan.

We also have a strong historical influence of charity care in Taiwan.  More than 10% of our healthcare sector is owned and operated by charity organisations, a vestige of the missionaries and their historical impact on our society.

The third area of growth is internal.  Again, we have a strong history of funding growth from internal capacity.

 

HK: And foreign investment?

 

Dr. Wu: We have few foreign investors in our sector at this time.  However, a growing trend we’re starting to see is an increase in the number of joint-ventures in our “clinics.”

 

HK: Have these healthcare companies migrated to listing on the exchange?

 

Dr. Wu: Direct listing by healthcare companies is not allowed.  We have a structure of holding companies and they can be listed.  Today there are two.

 

HK:  These regulations can have a challenging effect on companies interested in expansion and growth. 

 

Dr. Wu: Yes.  Min-Sheng General Hospital recently tried to list and were denied.  In response the sold their assets and buildings to ING and now lease them back.  This did generate additional funds for the hospital group.

 

HK: Are there other regulator challenges healthcare companies face?

 

Dr. Wu: Well, our environment is fairly positive.  For instance, medical equipment is only charged a VAT of 5 % (editor’s note: Bulgaria’s VAT on medical equipment is 20%).  Healthcare services are not taxed to the consumer, and our corporate tax on profits for healthcare is a flat 25%.

 

HK: Dr. Wu, you’re the head of both the Taiwan Hospital & Clinic Association and the Task Force on Medical Travel.  Can you tell us about these two associations, their missions, and so on?

 

Dr. Wu: Yes.  The Association is made up of private hospitals here in Taiwan.  We have 150 hospitals and 50 clinics as members.  In Taiwan, there are a total of 510 hospitals and more than 10,000 clinics.

The Task Force was started in October 2007 with a three-year sponsorship by the national government.  Our intention, our mission, is to increase the numbers of patients coming to Taiwan for medical care.

Taiwan has a modern, advanced healthcare sector throughout the country.  One small example is the number of PET scans in relation to other countries.  For instance, here we have 33 PET scans for our population of 23 million whereas in comparison to say Thailand, with its population of 80 million, it has only 3 PET scans.

Another example of the state of our healthcare sector is the commitment and investment in medical informatics.  For instance, all systems at Chang-Gung Hospital are computerized.  That’s all systems, from lab to reimbursement. 

Throughout the country all payments by the NHI are done online and we have regulations that require both providers and the NHI to process claims within a certain number of days.

 

HK: During my presentation yesterday to the conference you’ll remember I stated Taiwan’s best market for international patients wasn’t necessarily the US or Europe but rather the Chinese mainland and Eastern Russia.  How does Taiwan see the recent discussions in trade and tourism with China in relation to medical care?

 

Dr. Wu:  Agreed. We’re very keen on the future.  Though there are challenges with the first agreements to allow tourism into Taiwan from China, we believe there is great potential for medical care here.  In fact, our government is working to allow China residents a special visa for medical care here in Taiwan.  This will take a short time, but we’re preparing for this future.

 

HK: Dr. Wu, it has been a pleasure talking with you and learning about Taiwan’s healthcare market.  Thank you for taking the time to talk with us.

 

Dr. Wu: Thank you.

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