Medical Care Act: Forty Years of Institutional Regulation and Market Tension

30-second overview: The Medical Care Act does not regulate individual physicians (that is the Physicians Act of 1943), nor National Health Insurance payments (that is the National Health Insurance Act of 1994). It regulates how hospitals, clinics, and medical juridical persons exist, advertise, and handle disputes. Promulgated in 1986 with 91 articles, the Act was comprehensively amended in 2004 into 123 articles and introduced the “medical juridical person” system. In 2017, Article 82 was amended to revise physicians’ criminal liability into a “dual-requirement” standard. In May 2026, nurse-to-patient ratios were written into law. Yet after forty years, the reality facing Article 1’s stated aim to “promote the sound development of medical care enterprises” is this: 83% of hospitals and 74% of beds are private, emergency physicians leave the field at two to three times the U.S. rate, and nurses have resigned in waves, with nurse-to-patient ratios written into law only after the system was pushed to the edge of collapse.

On May 8, 2026, on the eve of International Nurses Day, the Legislative Yuan passed the third-reading amendment to the Medical Care Act establishing three-shift nurse-to-patient ratios.¹ The heaviest penalty for violations is a one-year suspension of operations, but implementation has been deferred until May 2028. In other words, Taiwan’s nurses must hold on for two more years before hospitals are legally compelled to provide sufficient staffing.

On the day the amendment passed, Taiwan’s emergency rooms were still congested. In an interview with The Reporter, Lo Hsiang-yun, director of emergency medicine at Linkou Chang Gung Memorial Hospital, left this sentence on record: “Do I really need to sacrifice myself for work?”² In the same report, Tsai Kuang-chao, director of emergency medicine at Far Eastern Memorial Hospital, asked: “How can there be an insurance system that makes hospitals unable to keep operating?”² Hsueh Cheng-chun, secretary-general of the Taiwan Society of Emergency Medicine, said: “This wave of emergency-room congestion has no visible end.”²

These three sentences stand on the same piece of Taiwanese land as Article 1 of the Medical Care Act, which speaks of “promoting the sound development of medical care enterprises, reasonably distributing medical care resources, improving medical care quality, protecting patient rights and interests, and promoting national health.”³ On one side is the vision written into law. On the other is exhaustion at the hospital front line. Between them lies the forty-year path the Medical Care Act has taken, and the path it has yet to complete.

National Taiwan University Hospital, photographed eastward from the pond on the northwest side of Taipei 228 Peace Memorial Park on May 10, 2011. NTU Hospital traces its predecessor to the “Taiwan Hospital of the Great Japanese Empire,” founded in 1895, and is one of the institutions that has witnessed the longest evolution of Taiwan’s public hospital system. Photo: 玄史生. CC BY-SA 3.0 via Wikimedia Commons.

Institutional Regulation and Personal Regulation: Why the Medical Care Act Is Separate from the Physicians Act

The Republic of China’s Physicians Act was enacted in 1943, 43 years before the Medical Care Act.⁴ Why did Taiwan, between the postwar period and 1986, have a law regulating individual physicians but no law regulating hospitals?

The answer lies in the difference between regulatory subjects. The Physicians Act regulates individual physicians: professional qualifications, duties of practice, and unlawful conduct in medical work. The Medical Care Act regulates medical institutions: how hospitals, clinics, and medical juridical persons are established, how they advertise, and how they bear responsibility. Before the 1980s, Taiwan’s private hospitals were not large in scale, and most were governed through individual physicians’ licenses and administrative orders from health authorities. Hospitals were not regarded as “institutions” independent of physicians.

In 1976, Chang Gung Memorial Hospital, donated and built by Wang Yung-ching, opened in Linkou.⁵ Throughout the 1980s, large private hospitals sprang up rapidly. The scale, complexity, and social influence of the institution called the “hospital” had already exceeded what a single physician’s license could cover. A dedicated law regulating “institutional conduct” was needed.

On November 24, 1986, Presidential Order Hua-Zong-(1)-Yi No. 5913 promulgated the full 91 articles of the Medical Care Act.³ The legislative timing was on the eve of Taiwan’s lifting of martial law, which took place on July 15, 1987, as the Legislative Yuan handled a wave of livelihood-related regulatory legislation amid political transition. Starting in 1988, the Department of Health, predecessor of today’s Ministry of Health and Welfare, began nationwide hospital accreditation.⁶ This was the first major implementation action after the Medical Care Act took effect.

From that day to 2026, the Medical Care Act has undergone thirteen amendments. Three were most critical: the comprehensive 2004 amendment introduced the “medical juridical person” system, turning hospitals into a special kind of “privately operated nonprofit” organization; the 2017 amendment to Article 82 changed physicians’ criminal liability into a “dual-requirement” standard, attempting to loosen the tension in physician-patient relations; and the 2026 amendment wrote three-shift nurse-to-patient ratios into law. Each amendment responded to a structural problem, but each also triggered new controversy.

📝 Curator’s Note
Do not confuse the Medical Care Act with the National Health Insurance Act. The National Health Insurance Act, enacted in 1994 and implemented in March 1995, governs payment: which medical services the National Health Insurance Administration purchases, and at what prices. The Medical Care Act governs institutions: whether a hospital can be established, whether it can advertise, and how disputes are handled. National Health Insurance is the ticket; the Medical Care Act is the venue rulebook. Operating together for forty years, the two have sustained the globally renowned coverage of Taiwan’s National Health Insurance system, and also the long-accumulated fatigue of medical providers.

The Double-Edged Sword of Private Nonprofits: The Cost of 83% of Beds

In 2004, the Medical Care Act underwent a major amendment, expanding from 91 articles to 123 articles⁷ and introducing the medical juridical person system. From then on, Taiwan’s hospitals were divided into four categories: public hospitals, established by government agencies, public enterprises, or public schools; medical foundation juridical person hospitals, established by donors who contribute property and register with the courts; medical association juridical person hospitals, jointly funded by members and permitted to distribute surplus; and private hospitals, established by individual physicians or partnerships.⁸

This classification prohibits for-profit hospitals. U.S.-style hospitals that are listed companies and issue dividends are illegal in Taiwan. Medical foundation juridical persons must allocate at least 10% of their annual surplus from medical income to research and development, talent training, and health education, plus at least 10% to medical relief and community medical services, meaning at least 20% must go to public-interest purposes.⁹ This is a key design in Taiwan’s medical governance: similar to Japan’s medical juridical persons, which prohibit profit distribution, and fundamentally different from the U.S. for-profit hospital system.

Yet the public-interest character written so clearly into law has another face in reality.

The 2020 figures: 83% of hospitals and 74% of beds were private.¹⁰ At the end of 2023, Taiwan had 476 hospitals, 23,421 clinics, 171,700 beds, and 73.3 beds per 10,000 people. Public hospitals suffered repeated losses and barely operated with government subsidies.¹¹ Private hospitals, meanwhile, grew ever larger as the National Health Insurance global budget expanded, out-of-pocket markets surged, and medical aesthetics and health-check services increased.

💡 Did You Know?
Taiwan’s share of private hospitals, 83%, is similar to South Korea’s 80% and Japan’s 80%, but it is fundamentally different from the United States, where roughly 25% of private hospitals are for-profit and can be publicly listed and distribute dividends. Taiwan’s “privately operated nonprofit” design avoids shareholder-first medical commodification, but it also creates another tension: to survive under the National Health Insurance global budget system, private hospitals continuously expand out-of-pocket services such as medical aesthetics, health checks, and self-paid drugs, while public hospitals sustain long-term losses because they carry policy mandates such as care for disadvantaged groups, remote-area services, and disaster response. This dual-track system turns “medical public interest” into a term that each side defines for itself.

Article 1 of the Medical Care Act states that “protecting patient rights and interests” and “promoting national health” are statutory purposes. The privatization of 83% of hospital beds is market reality. The gulf between them is the core problem that has remained unresolved across these forty years.

Article 82’s Dual Requirement: The Controversy Behind Rationalizing Physicians’ Criminal Liability

On December 29, 2017, the Legislative Yuan passed the third-reading amendment to Article 82 of the Medical Care Act.¹² The amended text changed physician negligence liability from the single requirement of “intent or negligence” to the dual requirement of “violating the necessary duty of care in medical practice and exceeding reasonable clinical professional discretion.”

The specific changes were:

• Paragraph 2, civil liability: “Where medical personnel cause harm to a patient in the course of performing medical services, liability shall be limited to cases caused by intent or by violation of the necessary duty of care in medical practice and exceeding reasonable clinical professional discretion.”¹³
• Paragraph 3, criminal liability: “Where medical personnel, in the course of performing medical services, negligently cause death or injury to a patient, liability shall be limited to cases in which they violate the necessary duty of care in medical practice and exceed reasonable clinical professional discretion.”¹³

The word “and” is crucial. Before the amendment, liability attached if one requirement for negligence was met. After the amendment, a physician must simultaneously violate the necessary duty of care and exceed reasonable clinical professional discretion to bear criminal liability. In legal technique, this is “dual-requirement doctrine”; in practice, it narrows the scope of physicians’ criminal liability.

Why amend it? On March 28, 2017, Legislator Chiu Tai-yuan questioned the Executive Yuan during the 6th sitting of the 3rd session of the 9th Legislative Yuan on “rationalizing medical criminal liability.”¹⁴ He advanced three points. First, Taiwan’s handling of medical disputes was excessively criminalized: a study covering thirty years found that, among litigation channels for medical disputes in Taiwan, criminal litigation accounted for 79%,¹⁵ an abnormally high share among major medical systems worldwide. Second, deteriorating physician-patient relations led to defensive medicine: physicians ordered unnecessary tests or refused high-risk operations to avoid being sued. Third, the five major specialties of internal medicine, surgery, obstetrics and gynecology, pediatrics, and emergency medicine could not recruit residents, a phenomenon colloquially known as “all five majors are empty.”

The Consumers’ Foundation opposed the amendment:¹⁶ “It not only narrows the criminal liability of medical acts, but even substantially reduces, in tandem, the civil liability of medical institutions and medical personnel.” The sequence advocated by the Consumers’ Foundation was: first establish a medical dispute compensation mechanism and a legal framework for handling medical disputes, then amend Article 82. Later, in 2022, the Legislative Yuan passed the Medical Accident Prevention and Dispute Resolution Act,¹⁷ with subordinate regulations implemented in 2024. But the “sequence” the Consumers’ Foundation demanded at the time had already become the reverse of history.

What changed in practice after the amendment? According to a study published in PMC NIH,¹⁸ after the Article 82 amendment, the prosecution rate for physicians, measured per 10,000 physicians per year, declined significantly, with decreases observed across all specialties. The study concluded that the amendment had a “protective effect” for physicians.

For patients, however, the figures are harsher. A study analyzing compensation amounts in district court civil judgments on medical disputes¹⁹ found:

Claim NT$8.36 million, receive NT$1.57 million. Lose nine lawsuits out of ten. “Winning the case but not getting the money” has long been criticized as a structural problem in Taiwan’s medical disputes. The Article 82 amendment resolved the criminal-liability standard on the physician side, but the compensation reality on the patient side did not improve in parallel.

⚠️ Contested View
Whether Article 82’s “dual-requirement doctrine” is a solution to physician-patient relations or a weakening of patient rights remains disputed. Supporters regard it as a necessary step in “rationalizing medical criminal liability,” removing physicians’ fear of being treated as criminal suspects so the five major specialties may have a chance to recruit. Opponents argue that it sets the negligence standard too high, making it even harder for patients who already have only an 11% win rate to assert their rights. The Medical Accident Prevention and Dispute Resolution Act, passed in 2022, attempts to fill the dispute-handling gap through a design of “timely care, mediation first, and accident prevention.” Whether it can truly improve the structure in which “patients win lawsuits but do not get paid” depends on practical experience accumulated in the coming years.

On the Eve of Nurses Day 2026: Nurse-to-Patient Ratios Entered Law Only After Collapse

The amendment passed on May 8, 2026 upgraded three-shift nurse-to-patient ratios, meaning nurse-to-patient ratios for day, evening, and night shifts, from Ministry of Health and Welfare administrative announcements into legally mandatory standards.¹ Penalties increase by hospital level: NT$50,000 to NT$250,000 for district hospitals, NT$200,000 to NT$1 million for regional hospitals, and NT$1 million to NT$2 million for medical centers. If, after three consecutive fines within one year, no improvement is made, the heaviest penalty is suspension of operations for one month to one year. Implementation has been deferred until May 2028, giving hospitals a two-year buffer.

How did this result come about? One must return to Taiwan’s emergency rooms in 2024 and 2025.

In 2024, 72 emergency physicians exited the field nationwide, accounting for 3.55% of practicing emergency physicians.² Among the middle generation, ages 40 to 49, the exit rate exceeded 10%, two to three times the U.S. emergency physician exit rate of 3% to 5%. In the same year, 1,021 nurses resigned over the full year,²⁰ and more than 40% of hospitals saw their emergency nursing workforce shrink. On average, each medical center lost 6.6 nurses, each regional hospital 3.8, and each district hospital 3.3. At Linkou Chang Gung’s emergency department, where physicians had previously been scheduled for 15 to 18 shifts per month, by August 2024 each physician had to take at least 20 shifts, while younger physicians were scheduled for as many as 23.²

The nurse-to-patient ratio standards had long been there. The Ministry of Health and Welfare implemented the 2024 three-shift nurse-to-patient ratio standards on March 1, 2024:²¹

But this was only an administrative announcement, without binding legal force. In the first year of implementation, only 30% to 40% of hospitals met the standards.²¹

After two years without improvement, the legislature intervened. The third-reading bill on May 8, 2026 adopted the Kuomintang version, passed by a blue-white majority. The Ministry of Health and Welfare assessed that implementing the new system would require an additional 5,000 personnel,²⁰ a gap difficult to fill in the short term; the industry expected hospitals with insufficient nursing staff to respond by closing beds. The “advisory committee” design proposed by the Democratic Progressive Party and Taiwan People’s Party was not included.

Article 1, Subparagraph 2 of the Medical Care Act speaks of the “reasonable distribution of medical care resources,” and Subparagraph 3 of “improving medical care quality.” But before the most crucial variable for reasonably distributing medical resources and improving medical quality, namely frontline nursing labor, was written into law, nurses had already expressed their position by “resigning.”

The End of the Emergency-Room Corridor: “An Insurance System That Makes Hospitals Unable to Keep Operating”

After the 2025 Lunar New Year, Taiwan’s emergency departments were hit by both influenza and norovirus. The Taiwan Society of Emergency Medicine publicly described that year’s emergency-room congestion as “unprecedented.”²²

The Reporter’s investigation, almost an oral history, recorded several statements that do not appear in the text of the Medical Care Act.²

Tsai Kuang-chao, director of emergency medicine at Far Eastern Memorial Hospital, described the scene in which young emergency physicians were recruited away by clinics: “Many young emergency physicians have been poached by clinics.” He then asked a question at a higher level: “A hospital that relies only on National Health Insurance income is bound to lose money, but how can there be an insurance system that makes hospitals unable to keep operating? When people trained for this work end up not doing emergency and critical care, this is not only a personal loss; it is a loss for the country and society.”

Lo Hsiang-yun, director of emergency medicine at Linkou Chang Gung Memorial Hospital, said: “Do I really need to sacrifice myself for work?” The Reporter’s journalist quoted this sentence repeatedly.

Hsueh Cheng-chun, director of emergency medicine at Tucheng Hospital, said: “This wave of emergency-room congestion has no visible end.”

None of these statements appears in any article of the Medical Care Act, but they are the real surface of the Act after forty years of implementation. The law speaks of “promoting the sound development of medical care enterprises.” What runs on the ground is a middle-generation emergency physician exit rate above 10%, young emergency physicians being poached by clinics, private hospitals supported by the National Health Insurance global budget to the brink of exhaustion, and public hospitals repeatedly losing money and surviving on subsidies.

On April 26, 2025, the international medical journal The Lancet published a Correspondence titled “Taiwan’s national health care on the brink of systemic collapse.”²³ Its authors were a physician team from China Medical University Hospital. But on May 23, 2025, The Lancet retracted the correspondence²⁴ because it had misreported “58.2% of severe COVID-19 patients intubated” as a “58.2% mortality rate among hospitalized patients,” misreported 2021 nurse density as 62 per 10,000 people when the actual figure was 78, and uploaded the wrong supplementary file. China Medical University Hospital publicly apologized and asked The Lancet to publish corrections.²⁵

The retraction itself is testimony: controversy over Taiwan’s National Health Insurance and medical system has reached a level where even correspondence in an international journal can contain numerical errors. That the phrase “systemic collapse” could appear in The Lancet reflects a real medical-sector anxiety that has spilled onto the pages of international journals. That reality is more worth reading than the retracted numbers themselves.

The Medical Advertising Chapter: The Legal Battlefield of Medical Aesthetics Disorder

Articles 84 to 87 of the Medical Care Act form the chapter on “medical advertising.” Article 84 provides that non-medical institutions may not place medical advertisements. Article 85 limits the content of medical advertisements to seven categories, including institution name, physician name, specialty, and National Health Insurance contracting status. Article 86 prohibits seven promotional methods, including using another person’s name, publicly claiming ancestral secret remedies, excerpting medical publications, interview-style reporting, and improper methods. Article 87 regulates the distinction between suggestive advertisements and academic publications.²⁶

The Article 86, Subparagraph 7 phrase “promotion by other improper means” has been a key target of Ministry of Health and Welfare enforcement since 2017. Specifically prohibited items include emphasis on “superlative terms” such as first domestic case, only, pioneering, most professional, guaranteed, and complete cure; before-and-after images not used for health education; public claims that seeking treatment comes with gifts or discounts; and preferential payment methods such as interest-free installment loans.²⁶ Violations of Article 86 are punishable under Article 103 by an administrative fine of NT$50,000 to NT$250,000.

In 2019, YouTuber Li Ke Tai Tai uploaded an unboxing video of a “cervical cancer self-sampling tool” to YouTube. Because it involved medical device advertising without prior review, the manufacturer and Li Ke Tai Tai were each fined NT$200,000,²⁷ making it the first fine imposed on influencer medical-device advertising.

But enforcement resources can never keep pace with the number of violations. In a feature on physician workforce distribution, The Reporter noted that Taiwan added around 300 out-of-pocket clinics in three years,²⁸ while the expansion of the medical aesthetics market far exceeded the capacity of inspection personnel. Online platforms, Instagram, Threads, Douyin, Xiaohongshu: every emerging medium creates new variants of advertising. The Ministry of Health and Welfare updated its rules on “providing medical information on the internet” several times in 2017 and 2021, but in this contest between law and market, the law has always been chasing.

Remote Areas’ Medical Dual Track: 508 People per Physician vs. 10,000

Article 1, Subparagraph 2 of the Medical Care Act speaks of the “reasonable distribution of medical care resources.” The actual distribution can be presented with one set of figures:

Nationwide, each physician serves an average of 508 people. But in some remote townships, including Fuxing in Changhua and Jinsha and Jinning in Kinmen, each physician serves more than 10,000 people.²⁹ The gap is about twentyfold.

Even more extreme: Shitan Township in Miaoli County, Dapu Township in Chiayi City, and Wuqiu in Kinmen County have no resident physician at all.²⁹ Another nine townships have only one physician.

How is remote-area care supplemented? The Ministry of Health and Welfare promotes the “Integrated Delivery System” for mountainous and offshore-island areas: mobile medical services, fixed-location outpatient clinics, specialty outpatient clinics, resident aircraft models for offshore islands, and an air-transfer review center. This is supplemented by the government-funded physician program, which recruited a total of 1,250 publicly funded medical students from 2016 to 2025, with 758 recruited as of 2022.²⁹

But the unfilled gap appears in infant and child mortality. A 2018 investigation by The Reporter found that Taitung, Pingtung, and southern Hualien were Taiwan’s three major high child-mortality areas,³⁰ showing how inadequate medical resources are directly reflected among the most vulnerable population.

The Tension Still Unresolved After Forty Years

The Medical Care Act is not a law that operates alone. Together with five other laws, it forms the skeleton of Taiwan’s medical governance:

• Physicians Act (1943), which regulates individual physicians.
• Medical Care Act (1986), which regulates medical institutions.
• National Health Insurance Act (enacted in 1994, implemented in 1995), which regulates National Health Insurance payments.
• Patient Right to Autonomy Act (passed in 2015, implemented in 2019, the first in Asia)³¹, which reinforces the Medical Care Act’s Articles 63 and 64 on patient consent and expressly prioritizes patient consent.
• Medical Accident Prevention and Dispute Resolution Act (passed in 2022, subordinate regulations implemented in 2024)¹⁷, which fills in the medical dispute mediation mechanism. Statements made during communication, care, and dispute mediation, as well as medical institutions’ voluntary reports and root-cause analysis improvement content, may not be admitted as litigation evidence or used as a basis for judgment.
• Regenerative Medicine Act + Regenerative Medicine Preparations Act (passed in 2024), special laws spun out from the Medical Care Act to regulate cell therapy and gene therapy.³²

Together, these six laws form a full picture of Taiwan’s medical governance, with the Medical Care Act as the institutional pillar. Yet every new law has been added because the Medical Care Act itself left gaps it could not cover: the Physicians Act cannot regulate institutions, the Medical Care Act cannot regulate National Health Insurance payments, the Medical Care Act cannot govern individual advance medical decisions, the Medical Care Act cannot regulate regenerative cells, and the Medical Care Act cannot handle dispute mediation. Each gap becomes the entrance to a new law.

✦ The Medical Care Act says it aims to “promote the sound development of medical care enterprises.” After forty years, there are more hospitals, stronger technologies, and higher coverage. But nurses have resigned in waves, emergency physicians exit at more than twice the international rate, private hospitals have expanded to 83%, public hospitals live on subsidies, criminalization accounts for 79% of medical dispute litigation, and each physician in some remote areas still serves 10,000 people. The words in the law are not wrong, and the exhaustion on the ground is not wrong either. The remaining question is: in the second forty years, how will the Medical Care Act shorten the distance between the two?

In the early hours of May 8, 2026, the Legislative Yuan passed three-shift nurse-to-patient ratios. Tsai Kuang-chao’s sentence, Lo Hsiang-yun’s sentence, and Hsueh Cheng-chun’s sentence still echo down the corridors of every emergency room in Taiwan. No one can write into law when the next amendment will come or which article it will amend. But nurses, emergency physicians, and residents in the five major specialties are still expressing their position through “not coming” and “resigning.”

The words written in law will be read by readers. The unwritten words are recorded instead by hospital walls and by the patients crowded into their corridors.

Further Reading:

• Taiwan’s Medical Care and National Health Insurance — The globally renowned coverage rate and payment structure of the National Health Insurance system are the “payment-side” partner to the Medical Care Act after implementation.
• A Practitioner’s Account of the History of Taiwan’s Two Regenerative Medicine Laws — The two regenerative medicine laws passed in 2024 are special laws spun out from the Medical Care Act to fill the regulatory gap in cell therapy.
• Taiwan’s Disaster Medical System — How the Medical Care Act Article 1 principle of “reasonable distribution of medical care resources” operates in major disaster scenarios.

References

Image Sources

This article uses one CC-licensed image, cached under public/article-images/society/ to avoid hotlinking the source server:

• Hero: NTU Hospital View from Pond of Taipei New Park — Photo: 玄史生, 2011-05-10, eastward view of NTU Hospital from the pond on the northwest side of 228 Peace Memorial Park. CC BY-SA 3.0 via Wikimedia Commons.