Health for all in the Republic of Korea: one country's experience with implementing universal health care.
Health care reforms in many countries face the twin challenges of providing universal coverage while controlling spiraling costs. Sixteen years ago the Republic of Korea had no national plan for health insurance, and only 8.8% of the population was covered. In 1975, health care accounted for 2.8% of GDP with government providing 12% of the finances. In 1977, Korea adopted a policy designed to achieve universal coverage while maintaining fee-for-service reimbursement. Korea incrementally established an employer based health care scheme by first mandating coverage for businesses, then government employees and teachers. Coverage was later extended to the poor, the self-employed, and residents of rural areas. Independent insurance societies manage each scheme, set premiums and co-payments, and are responsible for maintaining financial viability. By 1991, 30% of Korea's health care expenditures were from public funds, and health care costs had risen to 7.1% of GDP. Health care reform in Korea has been successful in achieving universal coverage, providing for a full range of services, and eliminating adverse selection. The system is financially solvent, costs are equitably distributed with the government providing subsidies when necessary, and small businesses have not been unduly burdened economically. Attempts to limit costs, however, have been unsuccessful. Patient demand for health care has remained surprisingly resistant to increasing co-payments. Providers have responded to lower physician and hospital fees by providing shorter, more frequent patient visits, relabeling services, and increasing hospital admissions. Competition between insurance societies has not materialized in a meaningful way to control costs.
RAND, Santa Monica, CA 90407.
J W
JW
Peabody
S W
SW
Lee
S R
SR
Bickel
D017048:Health Care Costs; D018166:Health Care Reform / Q000191:economics* / Q000331:legislation & jurisprudence; D006301:Health Services Needs and Demand; D007348:Insurance, Health / Q000331:legislation & jurisprudence*; D007723:Korea; D009313:National Health Programs / Q000191:economics / Q000331:legislation & jurisprudence*