Managing Health Expenditures under National Health Insurance. The Case of Korea

摘要

South Korea's gradual expansion of medical insurance over a twelve year periodachieving universal coverage in 1989 has been a major social policy accomplishment. Health care spending at current growth rates will absorb between 11.5% and 13.5% of Korea's Gross Domestic Product (GDP) in the year 2000 potentially crowding out other investments and damaging exports. The paper analyzes the root causes underlying the rapid increase in health care costs: demand factors, supply factors, financial incentives, and administrative inefficiency. It argues that continuing cost escalation has an economic cost, a financial cost, and a social cost, and suggests a paradigm to analyze alternative strategies for controlling health care expenditures. Strategies are either: (1) micro or macro management in style; and (2) supply side or demand side in emphasis. Finally, it examines the argument for regulating the private sector and for setting limits on freedom of choice for patients and providers in order to reach the objective of achieving an equitable, affordable and sustainable medical care system of acceptable quality.