Healthcare in South Korea: An actual discussion of a healthcare plan

[davidpdx]

Cross posted from GDP:

I've seen a lot of threads talking about healthcare and people saying this can't be done or there is no proof. Ok, let's talk specifically about one country's healthcare system: South Korea

What is it: A universal healthcare system
Is it perfect: No. In fact, no system is.
What does it do: Provides healthcare to 50 million people in South Korea

First, a description:

Introduction

South Korea has universal health insurance, which started in July 1977. All medical societies were merged into the National Health Insurance Service in 2000. Nearly all South Koreans are beneficiaries of the program, therefore almost reaching the goal of providing health insurance for all South Korean citizens. The insurance is funded by contributions, government subsidies, and tobacco surcharges and the National Health Insurance Corporation is the main supervising institution. The program is fair in practice; it gives the same amount of medical expenses and reimbursements for all citizens, regardless of how much they are paid. It administers longer term care services for the elderly. The National Health Insurance started to develop deficits starting in 1996, when the total health expenditures exceeded the total income. The government has been raising the insurance premiums to make up for the deficit, but many health policy experts predict that the increase will not solve the deficit. About 54% of health expenditure is met by the National Health Insurance Service. The remaining 46% is mostly met by out of pocket contributions. Healthcare expenditure is around 7.2% of GDP, and has increased from $64 billion in 2009 to $113 billion in 2015.

What does it offer:

Healthcare Delivery System: Korean patients have freedom of choice. Korean patients can go to any doctor or any medical institution, including hospitals, which they choose. The referral arrangement system is divided into two steps. The patient can go to any medical practitioner office except specialized general hospitals. If the patient wants to go to a secondary hospital, he/she has to present a referral slip issued by the medical practitioner who diagnosed him/her first. There are some exceptions: in the case of childbirth, emergency medical care, dental care, rehabilitation, family medicine services, and hemophiliac disease, the patient can go to any hospital without a referral slip.

[Song, J.S. (2009). The South Korean Health Care System. JMAJ 52(3). p 206–209, 2009]

The Structure of National Health Insurance Program

[IMG][/IMG]

Funding sources

The National Health Insurance Program has three sources of funding: contributions, government subsidies, and tobacco surcharges. The first source of funding is the payments (contributions) made by the insured. Employee insured individuals are required to contribute 5.08% of their salary. The employer and employee each pay 50% of this amount. The contributions of self-employed insured individuals are based on their level of income. To calculate the income, the insured person’s property, income, motor vehicles, age, and gender are taken into consideration. For the insured living on islands or remote rural areas, there is a system of reduced contributions. The second source of funding is the government. The National Government provides 14% of the total annual projected revenue, which is comprised of the contributions paid by the insured of National Health Insurance Program. The third source of funding is the surcharge on tobacco. This provides 6% of the total annual projected revenue.

[Song, J.S. (2009). The South Korean Health Care System. JMAJ 52(3). p 206–209, 2009]

Note: The above information refers to a 5.08% contribution. That amount is 6.07% as of 2014.

I have lived in South Korea for almost 12 years now and have had nothing but good experiences with healthcare here. With that, I urge people to read some of the sources I've added about the South Korea system.

Sources and Good Reads:

Chun, C.B. (2009) Republic of Korea: Health system Review
http://www.euro.who.int/__data/assets/pdf_file/0019/101476/E93762.pdf

Kwon, S. (2009). Thirty years of national health insurance in South Korea: lessons for achieving universal health care coverage. Health Policy Planning, 24(1). p. 63-71. http://heapol.oxfordjournals.org/content/24/1/63.full

Lee, J.-C. (2003). Health Care Reform in South Korea: Success or Failure? American Journal of Public Health, 93(1), 48–51. http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1447690/

Na, S & Kwon, S. (2015). Building Systems for Universal Health Coverage in South Korea
https://openknowledge.worldbank.org/bitstream/handle/10986/22395/Building0syste0erage0in0South0Korea.pdf

OECD (2009). OECD Health Care Quality Review: Korea, assessment and recommendations.
http://www.oecd.org/els/health-systems/49818570.pdf

Song, J.S. (2009). The South Korean Health Care System. JMAJ 52(3). p 206–209, 2009
https://www.med.or.jp/english/journal/pdf/2009_03/206_209.pdf

Wikipedia: Health Insurance in South Korea
https://en.wikipedia.org/wiki/Health_in_South_Korea#Health_insurance_system

[MeNMyVolt]

1. K&R. Thank you for this David.

A lot of this sounds good, though, one sentence jumped out at me. The remaining 46% is mostly met by out of pocket contributions. That seems high to me. So I went to your second link and saw that the max out of pocket was $4800 ($2400 every 6 months). Is there any type of sliding scale based on income for the max OOP? Much like the ACA, which I'm a big fan of, these high deductible/hi max OOP policies really keeps people from actually using their insurance. It shouldn't be that way.

I see that you're happy after 12 years in this system. One personal question, and I completely understand that's it's none of my business, do you utilize a lot of health care services, or are you a generally healthy person? Those co-pay rates seemed kind of high, especially with the drugs. But then again, I'm guessing drug costs are lower than the US.

Again, thank you for the excellent info.

[davidpdx]

4. I don't know if there is a sliding scale on the out of pocket contributions

People do tend to buy supplemental insurance (for things like cancer and other major illnesses) though we haven't yet.

I'm pretty healthy, although I do go to the doctor's once a month for medication. I know what the price is for one of them for a month without insurance and it would be three times higher than I pay for all my medications and doctors visit if I didn't have the insurance. Also recently I was sick with bronchitis and had to go in to see the doctor a few times. I paid like $4 for the visit and close to the same for my prescription. I believe you are correct about drug prices being lower.

[forthemiddle]

2. The National Government provides 14%

Of the total annual projected revenue.

Ok what am I missing? Where does the National Government get the 14% if not through other taxes?

[davidpdx]

5. That is probably coming from other taxes, as I stated above

They tax cars heavily to try to keep people from driving (the roads are good, but the number of cars on the roads exceeds capacity most of the time causing heavy traffic jams). The property tax is minimal at least for us because we own a small house and it is in a large complex. Every time you buy or sell are car or house there is the acquisition tax. Then the funnest of them all the VAT tax. So yes, we do get taxed heavily depending on what we own (car or house) and what we buy.

[Recursion]

3. And 46% of health care spending is out-of-pocket

That's significantly higher than the US.

[davidpdx]

6. The only thing I can think of on that one is that it is prescriptions

There are some drugs that the Korean Government will not cover, but are available here. I would have to find someone who could explain why that is so high. Again as I said above, things like MRIs and CTs I believe are not covered, neither is most dental work.

Note: I did confirm with my wife about MRIs and CTs. I had one a number of years ago and she said it was not covered. It very well could be that there are other things that aren't covered that I'm not aware of.

[Recursion]

7. When prices are low, out of pocket spending isn't a real problem

It sounds like that's something of the dynamic here.

Like the rest of the world except us, they regulate provider prices.