- Email: [email protected]
South Korea: An interesting case to study
Health Policy 120 (2016) 577–579
Contents lists available at ScienceDirect
Health Policy journal homepage: www.elsevier.com/locate/healthpol
Editorial
South Korea: An interesting case to study
In this issue of Health Policy, we put special emphasis on South Korea, a country which has seen a remarkable development, both economically but also in respect to its health system and health services research. A low-income country barely 50 years ago, it started to embark on a journey to achieve universal health coverage 40 years ago in 1977 – and achieved it only 12 years later in 1989. Rapid economic growth and political commitment of the government for political legitimacy contributed to the rapid achievement of the universal health coverage [1]. In 2000, more than 350 health insurance funds were all merged into a single insurer system, which increased the pooling and purchasing capacity of the health insurance system. The single insurance pool has also provided a big database of national health insurance system, connecting the entire population and all health care providers. While population coverage was thus achieved very rapidly, this partly happened on the price that the third dimension of coverage, i.e. the degree of cost-sharing, has remained high in OECD comparison. In 2014, outof-pocket (OOP) expenditure amounted to 37% of total health expenditure, the second highest value after Mexico, but down from around 60% in the early 1990s. High OOP payment is a barrier to health care access and results in catastrophic health expenditure or unmet need for health care. By comparing the income and consumption patterns of the households with and without catastrophic health expenditure, Kim and Yang showed that household with catastrophic expenditure experienced huge challenges in household consumptions [2]. To cope with high OOP payment for health care, many people are enrolled in private health insurance, and its role and impact on national health insurance has been controversial in Korea. Even after controlling for potential selection bias, people with private insurance used more health care than those without it, but the moral hazard effect was greater for outpatient care than inpatient care [3]. In this issue, Ko explores if the unmet need results in a deterioration of health outcomes and showed that
http://dx.doi.org/10.1016/j.healthpol.2016.06.002 0168-8510/© 2016 Published by Elsevier Ireland Ltd.
unmet need was associated with 1% decline in healthrelated quality of life (measured by EQ-5D) and 4.5% decline in self assessed health one year later [4]. Park and colleagues examine the association among socioeconomic status, employment, and unmet need over time [5]. They show that near-poor older people are likely to experience increased risk of unmet need due to non-financial constraints over time and near-poor working older people are at the highest risk of unmet needs. As the lowest-income population were more likely to experience unmet need, they used (public) community health centers more frequently as Han and colleagues show [6]. To cope with the problem of high OOP payment and improve financial protection, government reduced costsharing levels for patients with high burden of health costs, such as cancer, and health service researchers are studying the effects of changing co-payment rates on utilization and expenditure. Kim and Kwon examined the impact of the policy on the equity in the use of tertiary care hospitals, which provide more specialized care but with higher fee [7]. Based on difference-in-difference and triple difference estimators with liver disease and cardio-cerebrovascular disease patients as control groups, they showed that the policy improved the access to tertiary hospital care more for lower-income cancer patients but the gap between the high- and low-income groups persists. The policy reduced the overall catastrophic health expenditure, but less for low-income group probably because the increased use of health care was greater for low-income people [8]. A potential side effect of the policy of the reduction in copayment for cancer patients is patient concentration in capital area where tertiary-care hospitals are located [9]. As financial barrier is reduced, patients were more willing to travel to get treatment in large general hospitals. The Korean health system consists predominantly of private health care providers paid by fee-for-services, which has been a challenge to financial sustainability. Kim and colleagues show, also in this issue, that DRG-based payment system reduced cesarean section, and the longer the
578
Editorial / Health Policy 120 (2016) 577–579
hospital adopted DRG-based payment, the less likely it is to perform cesarean section [10]. Payment system reform toward a DRG-based prospective payment system has not been fully implemented due to oppositions of providers although it has positive impacts on provider behavior. Pharmaceutical expenditure accounts for a larger share of national health expenditure in Korea than other OECD countries, and government introduced various policy measures for cost containment. Government introduced HTA (Health Technology Assessment) for medicines in the decision making for reimbursement. According to Bae et al. [11], about 70% of the medicines submitted were listed, and stakeholders evaluated that the positive listing based on HTA has improved the consistency of reimbursement decision while the accessibility to new medicines has been decreased. Stakeholders also want to get access to more information about the decision criteria of the listing. Park and colleagues compared the cases of listed and rejected cases for the first 2 years of the positive listing policy and concluded that clinical benefit and cost-effectiveness were the major factors for the reimbursement decision [12]. In addition to the positive listing for new medicines, government introduced de-listing of medicines, which are no-longer cost effective. However, the de-listing policy was not effective in the containment of pharmaceutical expenditure. Using an interrupted time series analysis, Park et al. in this issue show that the policy has not affected the trend in pharmaceutical expenditure although some policy effects were observed for physician clinics and some therapeutic classes of medicines [13]. Government also implemented the outpatient prescription incentive program for physicians and price cuts of medicines. After the prescription incentives were implemented, the trend in pharmaceutical expenditure per claim was shifted downward, and the across-the-board price cut reduced the pharmaceutical spending, but the effect did not last long [14]. Kwon and colleagues showed a similar result that price cut did not have an intended effect on pharmaceutical expenditure in the case of anti-hyperlipidemic drugs [15]. Use of (switching to) expensive medicines contributed to the limited impact of the price control policy. Korea is experiencing a very rapid aging of population, which is also a challenge to the health care system. Government introduced a mandatory insurance for long-term care of older people. The long-term care insurance improved the access to long-term care for older people, especially for the poor whose copayment is subsidized [16]. However the coordination between the two social insurances is a crucial challenge in Korea, especially between long-term care hospitals (LTCHs) reimbursed by national health insurance and long-term care facilities (LTCFs) by long-term care insurance. Kim and colleagues showed that the characteristics of older people in LTCHs and LTCFs, in term of health care needs and long-term care needs, are similar, resulting in potential competition among the two types of providers and coordination failure among the two public insurance systems [17]. Korean health care system also has a challenge to meet the increasing expectation of consumers. Park et al. show, also in this issue, that satisfaction with quality of care is the most important determinant of the overall satisfaction
with health system [18]. Although government introduced National Cancer Screening Program, which provides free screening for stomach, liver, colorectal, breast, and cervical cancer, the quality and effectiveness of the program can be questioned due to low positive predictive values (PPVs) and sensitivity [19]. Quality of care can be measured in various ways and, for ambulatory care sensitive conditions, timely and effective outpatient care and continuity of care affects quality of care. In this issue, Nam et al. show that continuity of care contributed to the reduction in the risk of hospital admissions for patients with hypertension [20]. Previously, Hong and Kang also showed that continuity of ambulatory care for the initial 3 years decreased the risk of hospitalization and saved health expenditure in the subsequent year [21]. Volume also has an effect on quality, and the volume-outcome relationship was observed in delivery patients, especially for cesarean sections [22]. Another interesting feature of Korea, and clearly instrumental to its researchers, are the huge databases. Thanks to universal coverage of population by mandatory health insurance with electronic billing and reimbursement, huge data base for covering the entire population and health care providers are available. Many of the research in this volume used the database of National Health Insurance (NHI), e.g. [7,9,10,13–15,20–22]. But a weakness of the NHI data is that it do not have information on expenditure on services that are not covered in the benefit package. Many research institutes in the public sector provide household panel data, which are also used extensively by researchers in Korea, e.g. [2–6]. Health Policy is committed to make this diversity of Korean health policy and health services research better known to the international audience. We have therefore decided to focus on South Korea to start our new feature of country-specific article collections on the journal webpage. This collection will initially contain all 20 Health Policy articles cited in this editorial [2–7,9–22] but we will update it when new articles became available. References [1] Kwon S. Thirty years of national health insurance in South Korea: lessons for achieving universal health care coverage. Health Policy and Planning 2009;24(1):63–71. [2] Kim Y, Yang B. Relationship between catastrophic health expenditures and household incomes and expenditure patterns in South Korea. Health Policy 2011;100(2):239–46. [3] Jeon B, Kwon S. Effect of private health insurance on health care utilization in a universal public insurance system: a case of South Korea. Health Policy 2013;113(1):69–76. [4] Ko H. Unmet healthcare needs and health status: panel evidence from Korea. Health Policy 2016;120(6):646–53. [5] Park S, Kim B, Kim S. Poverty and working status in changes of unmet health care need in old age. Health Policy 2016;120(6):638–45. [6] Han KT, Park EC, Kim SJ. Unmet healthcare needs and community health center utilization among the low-income population based on a nationwide community health survey. Health Policy 2016;120(6):630–7. [7] Kim S, Kwon S. Has the National Health Insurance improved the inequality in the use of tertiary-care hospitals in Korea? Health Policy 2014;118(3):377–85. [8] Kim S, Kwon S. Impact of the policy of expanding benefit coverage for cancer patients on catastrophic health expenditure across different income groups in South Korea. Social Science and Medicine 2015;138:241–7. [9] Han KT, Kim J, Nam CM, Moon KT, Lee SG, Kim SJ, et al. Association between reduction in copayment and gastric cancer patient
Editorial / Health Policy 120 (2016) 577–579
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
concentration to the capital area in South Korea: NHI cohort 2003–2013. Health Policy 2016;120(6):580–9. Kim SJ, Han KT, Kim SJ, Park EC, Park HK. Impact of a diagnosis-related group payment system on cesarean section in Korea. Health Policy 2016;120(6):596–603. Bae EY, Hong JM, Kwon HY, Jang S, Lee HJ, Bae S, et al. Eight-year experience of using HTA in drug reimbursement: South Korea. Health Policy 2016;120(6):612–20. Park SE, Lim SH, Choi HW, Lee SM, Kim DW, Yim EY, et al. Evaluation on the first 2 years of the positive list system in South Korea. Health Policy 2012;104(1):32–9. Park CM, Lee KS, Han E, Kim DS. Effects of delisting nonprescription combination drugs on health insurance expenditures for pharmaceuticals in Korea. Health Policy 2016;120(6):590–5. Han E, Chae S, Kim N, Park S. Effects of pharmaceutical cost containment policies on prescription behaviors and drug expenditure: focus on antibiotics. Health Policy 2015;119(9):1245–54. Kwon HY, Hong JM, Godman B, Yang BM. Price cuts and drug spending in South Korea: the case of antihyperlipidemic agents. Health Policy 2013;112(3):217–26. Kim H, Kwon S, Yoon N, Hyun K-R. Utilization of long-term care services under the public long-term care insurance program in Korea: implications of a subsidy policy. Health Policy 2013;111: 166–74. Kim H, Jung YI, Kwon S. Delivery of institutional long-term care under two social insurances: lessons from the Korean experience. Health Policy 2015;119(10):1330–7.
579
[18] Park K, Park J, Kwon YD, Kang Y, Noh JW. Public satisfaction with the healthcare system performance in South Korea: universal healthcare system. Health Policy 2016;120(6):621–9. [19] Jung M. National cancer screening programs and evidence-based healthcare policy in South Korea. Health Policy 2015;119(1):26–32. [20] Nam YS, Cho KH, Kang HC, Lee KS, Park EC. Greater continuity of care reduces hospital admissions in patients with hypertension: an analysis of nationwide health insurance data in Korea, 2011–2013. Health Policy 2016;120(6):604–11. [21] Hong JS, Kang HC. Continuity of ambulatory care and health outcomes in adult patients with type 2 diabetes in Korea. Health Policy 2013;109(2):158–65. [22] Lee KS, Kwak JM. Effect of patient risk on the volume–outcome relationship in obstetric delivery services. Health Policy 2014;118(3):407–12.
Soonman Kwon Seoul National University, Department of Health Policy and Management, Republic of Korea Reinhard Busse Department of Health Care Management, Berlin University of Technology, Germany E-mail address: [email protected] (S. Kwon)
Contents lists available at ScienceDirect
Health Policy journal homepage: www.elsevier.com/locate/healthpol
Editorial
South Korea: An interesting case to study
In this issue of Health Policy, we put special emphasis on South Korea, a country which has seen a remarkable development, both economically but also in respect to its health system and health services research. A low-income country barely 50 years ago, it started to embark on a journey to achieve universal health coverage 40 years ago in 1977 – and achieved it only 12 years later in 1989. Rapid economic growth and political commitment of the government for political legitimacy contributed to the rapid achievement of the universal health coverage [1]. In 2000, more than 350 health insurance funds were all merged into a single insurer system, which increased the pooling and purchasing capacity of the health insurance system. The single insurance pool has also provided a big database of national health insurance system, connecting the entire population and all health care providers. While population coverage was thus achieved very rapidly, this partly happened on the price that the third dimension of coverage, i.e. the degree of cost-sharing, has remained high in OECD comparison. In 2014, outof-pocket (OOP) expenditure amounted to 37% of total health expenditure, the second highest value after Mexico, but down from around 60% in the early 1990s. High OOP payment is a barrier to health care access and results in catastrophic health expenditure or unmet need for health care. By comparing the income and consumption patterns of the households with and without catastrophic health expenditure, Kim and Yang showed that household with catastrophic expenditure experienced huge challenges in household consumptions [2]. To cope with high OOP payment for health care, many people are enrolled in private health insurance, and its role and impact on national health insurance has been controversial in Korea. Even after controlling for potential selection bias, people with private insurance used more health care than those without it, but the moral hazard effect was greater for outpatient care than inpatient care [3]. In this issue, Ko explores if the unmet need results in a deterioration of health outcomes and showed that
http://dx.doi.org/10.1016/j.healthpol.2016.06.002 0168-8510/© 2016 Published by Elsevier Ireland Ltd.
unmet need was associated with 1% decline in healthrelated quality of life (measured by EQ-5D) and 4.5% decline in self assessed health one year later [4]. Park and colleagues examine the association among socioeconomic status, employment, and unmet need over time [5]. They show that near-poor older people are likely to experience increased risk of unmet need due to non-financial constraints over time and near-poor working older people are at the highest risk of unmet needs. As the lowest-income population were more likely to experience unmet need, they used (public) community health centers more frequently as Han and colleagues show [6]. To cope with the problem of high OOP payment and improve financial protection, government reduced costsharing levels for patients with high burden of health costs, such as cancer, and health service researchers are studying the effects of changing co-payment rates on utilization and expenditure. Kim and Kwon examined the impact of the policy on the equity in the use of tertiary care hospitals, which provide more specialized care but with higher fee [7]. Based on difference-in-difference and triple difference estimators with liver disease and cardio-cerebrovascular disease patients as control groups, they showed that the policy improved the access to tertiary hospital care more for lower-income cancer patients but the gap between the high- and low-income groups persists. The policy reduced the overall catastrophic health expenditure, but less for low-income group probably because the increased use of health care was greater for low-income people [8]. A potential side effect of the policy of the reduction in copayment for cancer patients is patient concentration in capital area where tertiary-care hospitals are located [9]. As financial barrier is reduced, patients were more willing to travel to get treatment in large general hospitals. The Korean health system consists predominantly of private health care providers paid by fee-for-services, which has been a challenge to financial sustainability. Kim and colleagues show, also in this issue, that DRG-based payment system reduced cesarean section, and the longer the
578
Editorial / Health Policy 120 (2016) 577–579
hospital adopted DRG-based payment, the less likely it is to perform cesarean section [10]. Payment system reform toward a DRG-based prospective payment system has not been fully implemented due to oppositions of providers although it has positive impacts on provider behavior. Pharmaceutical expenditure accounts for a larger share of national health expenditure in Korea than other OECD countries, and government introduced various policy measures for cost containment. Government introduced HTA (Health Technology Assessment) for medicines in the decision making for reimbursement. According to Bae et al. [11], about 70% of the medicines submitted were listed, and stakeholders evaluated that the positive listing based on HTA has improved the consistency of reimbursement decision while the accessibility to new medicines has been decreased. Stakeholders also want to get access to more information about the decision criteria of the listing. Park and colleagues compared the cases of listed and rejected cases for the first 2 years of the positive listing policy and concluded that clinical benefit and cost-effectiveness were the major factors for the reimbursement decision [12]. In addition to the positive listing for new medicines, government introduced de-listing of medicines, which are no-longer cost effective. However, the de-listing policy was not effective in the containment of pharmaceutical expenditure. Using an interrupted time series analysis, Park et al. in this issue show that the policy has not affected the trend in pharmaceutical expenditure although some policy effects were observed for physician clinics and some therapeutic classes of medicines [13]. Government also implemented the outpatient prescription incentive program for physicians and price cuts of medicines. After the prescription incentives were implemented, the trend in pharmaceutical expenditure per claim was shifted downward, and the across-the-board price cut reduced the pharmaceutical spending, but the effect did not last long [14]. Kwon and colleagues showed a similar result that price cut did not have an intended effect on pharmaceutical expenditure in the case of anti-hyperlipidemic drugs [15]. Use of (switching to) expensive medicines contributed to the limited impact of the price control policy. Korea is experiencing a very rapid aging of population, which is also a challenge to the health care system. Government introduced a mandatory insurance for long-term care of older people. The long-term care insurance improved the access to long-term care for older people, especially for the poor whose copayment is subsidized [16]. However the coordination between the two social insurances is a crucial challenge in Korea, especially between long-term care hospitals (LTCHs) reimbursed by national health insurance and long-term care facilities (LTCFs) by long-term care insurance. Kim and colleagues showed that the characteristics of older people in LTCHs and LTCFs, in term of health care needs and long-term care needs, are similar, resulting in potential competition among the two types of providers and coordination failure among the two public insurance systems [17]. Korean health care system also has a challenge to meet the increasing expectation of consumers. Park et al. show, also in this issue, that satisfaction with quality of care is the most important determinant of the overall satisfaction
with health system [18]. Although government introduced National Cancer Screening Program, which provides free screening for stomach, liver, colorectal, breast, and cervical cancer, the quality and effectiveness of the program can be questioned due to low positive predictive values (PPVs) and sensitivity [19]. Quality of care can be measured in various ways and, for ambulatory care sensitive conditions, timely and effective outpatient care and continuity of care affects quality of care. In this issue, Nam et al. show that continuity of care contributed to the reduction in the risk of hospital admissions for patients with hypertension [20]. Previously, Hong and Kang also showed that continuity of ambulatory care for the initial 3 years decreased the risk of hospitalization and saved health expenditure in the subsequent year [21]. Volume also has an effect on quality, and the volume-outcome relationship was observed in delivery patients, especially for cesarean sections [22]. Another interesting feature of Korea, and clearly instrumental to its researchers, are the huge databases. Thanks to universal coverage of population by mandatory health insurance with electronic billing and reimbursement, huge data base for covering the entire population and health care providers are available. Many of the research in this volume used the database of National Health Insurance (NHI), e.g. [7,9,10,13–15,20–22]. But a weakness of the NHI data is that it do not have information on expenditure on services that are not covered in the benefit package. Many research institutes in the public sector provide household panel data, which are also used extensively by researchers in Korea, e.g. [2–6]. Health Policy is committed to make this diversity of Korean health policy and health services research better known to the international audience. We have therefore decided to focus on South Korea to start our new feature of country-specific article collections on the journal webpage. This collection will initially contain all 20 Health Policy articles cited in this editorial [2–7,9–22] but we will update it when new articles became available. References [1] Kwon S. Thirty years of national health insurance in South Korea: lessons for achieving universal health care coverage. Health Policy and Planning 2009;24(1):63–71. [2] Kim Y, Yang B. Relationship between catastrophic health expenditures and household incomes and expenditure patterns in South Korea. Health Policy 2011;100(2):239–46. [3] Jeon B, Kwon S. Effect of private health insurance on health care utilization in a universal public insurance system: a case of South Korea. Health Policy 2013;113(1):69–76. [4] Ko H. Unmet healthcare needs and health status: panel evidence from Korea. Health Policy 2016;120(6):646–53. [5] Park S, Kim B, Kim S. Poverty and working status in changes of unmet health care need in old age. Health Policy 2016;120(6):638–45. [6] Han KT, Park EC, Kim SJ. Unmet healthcare needs and community health center utilization among the low-income population based on a nationwide community health survey. Health Policy 2016;120(6):630–7. [7] Kim S, Kwon S. Has the National Health Insurance improved the inequality in the use of tertiary-care hospitals in Korea? Health Policy 2014;118(3):377–85. [8] Kim S, Kwon S. Impact of the policy of expanding benefit coverage for cancer patients on catastrophic health expenditure across different income groups in South Korea. Social Science and Medicine 2015;138:241–7. [9] Han KT, Kim J, Nam CM, Moon KT, Lee SG, Kim SJ, et al. Association between reduction in copayment and gastric cancer patient
Editorial / Health Policy 120 (2016) 577–579
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
concentration to the capital area in South Korea: NHI cohort 2003–2013. Health Policy 2016;120(6):580–9. Kim SJ, Han KT, Kim SJ, Park EC, Park HK. Impact of a diagnosis-related group payment system on cesarean section in Korea. Health Policy 2016;120(6):596–603. Bae EY, Hong JM, Kwon HY, Jang S, Lee HJ, Bae S, et al. Eight-year experience of using HTA in drug reimbursement: South Korea. Health Policy 2016;120(6):612–20. Park SE, Lim SH, Choi HW, Lee SM, Kim DW, Yim EY, et al. Evaluation on the first 2 years of the positive list system in South Korea. Health Policy 2012;104(1):32–9. Park CM, Lee KS, Han E, Kim DS. Effects of delisting nonprescription combination drugs on health insurance expenditures for pharmaceuticals in Korea. Health Policy 2016;120(6):590–5. Han E, Chae S, Kim N, Park S. Effects of pharmaceutical cost containment policies on prescription behaviors and drug expenditure: focus on antibiotics. Health Policy 2015;119(9):1245–54. Kwon HY, Hong JM, Godman B, Yang BM. Price cuts and drug spending in South Korea: the case of antihyperlipidemic agents. Health Policy 2013;112(3):217–26. Kim H, Kwon S, Yoon N, Hyun K-R. Utilization of long-term care services under the public long-term care insurance program in Korea: implications of a subsidy policy. Health Policy 2013;111: 166–74. Kim H, Jung YI, Kwon S. Delivery of institutional long-term care under two social insurances: lessons from the Korean experience. Health Policy 2015;119(10):1330–7.
579
[18] Park K, Park J, Kwon YD, Kang Y, Noh JW. Public satisfaction with the healthcare system performance in South Korea: universal healthcare system. Health Policy 2016;120(6):621–9. [19] Jung M. National cancer screening programs and evidence-based healthcare policy in South Korea. Health Policy 2015;119(1):26–32. [20] Nam YS, Cho KH, Kang HC, Lee KS, Park EC. Greater continuity of care reduces hospital admissions in patients with hypertension: an analysis of nationwide health insurance data in Korea, 2011–2013. Health Policy 2016;120(6):604–11. [21] Hong JS, Kang HC. Continuity of ambulatory care and health outcomes in adult patients with type 2 diabetes in Korea. Health Policy 2013;109(2):158–65. [22] Lee KS, Kwak JM. Effect of patient risk on the volume–outcome relationship in obstetric delivery services. Health Policy 2014;118(3):407–12.
Soonman Kwon Seoul National University, Department of Health Policy and Management, Republic of Korea Reinhard Busse Department of Health Care Management, Berlin University of Technology, Germany E-mail address: [email protected] (S. Kwon)