'Moon Jae-in care' could hurt state-run healthcare

By Lee Kyung-min

Opinions are split over the financing of "Moon Jae-in care," the expanded coverage of the state-run health insurance program, which seeks to guarantee better access to affordable healthcare especially to the underprivileged, children and the elderly.

The government plans to use about 10 trillion won ($9.7 billion), almost half of the 21 trillion won reserves made from the profits of running the National Health Insurance Service (NHIS) thus far, and continue the policy of raising the insurance rate by up to 3.2 percent every year. But opposition parties and the medical community _ mostly doctors _ raise concerns that the government has no concrete plans to secure financial resources.

While many of them agree the new welfare plan is a step in the right direction, they say it will definitely cause a huge financial burden for taxpayers over the long term as the country will be unable to generate enough tax revenue due to the aging population and low birthrate. Some claim the NHIS could go bankrupt in 2026.

Doctors forced to sacrifice?

Doctors say they are forced to sacrifice, as the measure fails to give due consideration to the inevitable decrease in hospital revenue.

Many doctors have profited by recommending expensive procedures including high-tech medical equipment administered examinations or treatments, almost all of which remain uninsured and something a sick person cannot afford to refuse.

Doctors who run small- to medium-sized clinics say their practices will definitely go bankrupt because patients will stop coming to them if the government pays the additional fees needed to see doctors at large university-run hospitals, which they claim will result in significant decreases in their revenue.

The heavy dependence on uninsured treatments by many small- and medium-sized clinics will further hurt their practices as they rely on such expensive treatment for nearly half of their revenue while large hospitals depend on less than 25 percent.

If most patients go to large hospitals, shutdowns are inevitable, they add, as doctors can recommend treatment only to patients that come to the clinics.

According to data from the Ministry of Health and Welfare, as of 2015, out of 69.4 trillion won in medical spending, over 80 percent, or 57.9 trillion won, was insured treatment, 44 trillion won paid by the NHIS and 13.9 trillion won paid by patients. The remaining 11.5 trillion won was uninsured, which patients had to shoulder without state support. "Moon Jae-in care" seeks to insure about 3,800 treatments under the NHIS.

Low healthcare quality feared?

Doctors oppose the revision claiming the quality of medical services will deteriorate as a whole, because they would end up caring less about the condition of individual patients, but more about how many they treat.

Many frustrated doctors, would be tempted to resort to other means to increase profits such as using low-quality treatment materials.

Under the current system, doctors are unable to make money by seeing a patient, performing surgery, administering a shot or admitting a patient. The more they perform such treatments, they say, the more their revenue decreases. The only way to make money would be to conduct uninsured high-tech medical equipment administered examinations or treatments.

Negotiations over 'proper' fees for medical services

Doctors say the government should increase individual fees for medical services by 35 percent for all medical treatments, a demand the government remains reluctant to accept.

Under the state-run single-payer NHIS program in Korea, medical institutions have to treat patients first, and seek treatment costs from the NHIS later. If the ministry-supervised Health Insurance Review and Assessment Service deems the expenditure unnecessary or excessive, the NHIS won't give the amount sought by the medical institutions, in which case they have to pay out of their own revenue. Many medical institutions have claim this system is the main cause for continued deficits at hospitals, resulting in low-quality services.

Health insurance rate increase inevitable

Data from the National Assembly Budget Office estimated the implementation of "Moon Jae-in care" will render the NHIS in the red next year, adding reserves will be depleted 2026.
The assessment, premised on the expected spike in the number of people seeking medical services at a lower price, concluded a 3.2 percent health insurance rate increase will be required by 2025 or the state-run system will go into the red.

In 2026, the rate should increase by an additional 4.9 percent, resulting in the exceeding of the 8 percent increase ceiling under the NHIS law. "While the President said the revision is crucial to prevent household bankruptcy caused by heavy medical costs, the people will have to pay up to 37 percent more than the current rate in 2027," said an official from the Korea Medical Clinic Association representing some 7,000 doctors who run small- and medium sized clinics.

The government, he added, should consider taking up to 15 percent of income as a monthly premium from healthcare subscribers for the NHIS the same way some Organization for Economic Co-operation and Development (OECD) countries do, which would cause a massive backlash and cost him major political capital.

According to 2014 OECD data, out-of-pocket household medical spending in Korea was 36.8 percent, the second-most expensive after Mexico where households have to pay more than 40 percent of costs. Koreans pay more than twice the OECD average (19.6 percent). The government plans to spend 30.6 trillion won by 2022 to reduce out-of-pocket household medical spending to less than 30 percent.

The NHIS and the health ministry said a three-party deliberative body will determine the fees for medical services.

The health insurance rate is determined once a year, in late May, by a 24-member deliberative body comprised of eight people representing medical service suppliers, consumers and the public interest.