[Friday Story] Rapid Increase in Traffic Accident Patients at Korean Medicine Clinics... Controversy Over Insurance Money Leakage

Number of Car Insurance Patients at Korean Medicine Clinics Reaches 880,000
Increased by 300,000 in 4 Years Despite COVID-19
"Vicious Cycle of Shifting Car Insurance Consumer Burden"

[Asia Economy Reporter Oh Hyung-gil] Park Woong-jae (35, pseudonym), who was rear-ended while visiting an acquaintance in the hospital during lunch recently, began to feel aches and pains all over his body from the day after the accident, as if he had the flu. Since there were no visible wounds, he visited a traditional Korean medicine clinic specializing in traffic accident treatment instead of a hospital after work.

After receiving Chuna therapy, acupuncture, and cupping, Park was told by the doctor that the blood stasis needed to be resolved to prevent aftereffects, so he also received a prescription for herbal medicine. Park said, "The clinic told me that even if I don't feel pain immediately, I need to keep coming," adding, "They said that if it is a clear-cut case of the other party's fault, I can receive all the treatments without bearing the cost, so I plan to continue going regularly."

Last year, the medical institutions most visited by traffic accident patients were traditional Korean medicine clinics. For the first time since related statistics were compiled, they surpassed Western medical hospitals.

Despite the decrease in the number of traffic accident patients due to reduced vehicle usage amid the COVID-19 pandemic, the number of patients and medical expenses at traditional Korean medicine clinics and hospitals actually surged.

The insurance industry points out that the standards for automobile insurance medical expenses are lax and that excessive treatment at traditional Korean medicine hospitals and clinics is causing continuous insurance fund leakage, calling for a reorganization of the review and evaluation system for traditional Korean medicine treatment costs.

According to the automobile insurance medical expense statistics from the Health Insurance Review & Assessment Service on the 16th, the number of patients treated at traditional Korean medicine clinics last year was 880,339, a 2.3% increase from 860,082 the previous year. During the same period, the number of patients at traditional Korean medicine hospitals also rose by 16.4% to 546,948.

The number of patients at traditional Korean medicine clinics, which was only about 590,000 in 2017, increased by 300,000 in just four years. During the same period, the number of patients at traditional Korean medicine hospitals more than doubled.

On the other hand, the number of patients at Western medical clinics, which had recorded the highest patient numbers until now, decreased by 8.2% from 902,092 in 2019 to 827,667 last year. The number of patients at hospitals and general hospitals dropped sharply by 11.9% and 16.6% to 469,778 and 364,022, respectively, compared to the previous year.

The total number of patients treated with automobile insurance funds last year was 22.66 million, down 3.8% from 23.56 million the previous year. Although the overall number of patients decreased, the phenomenon of patients concentrating only at traditional Korean medicine clinics and hospitals intensified.

Traditional Korean medicine treatment costs also surged. Last year, automobile insurance expenses for traditional Korean medicine reached 1.1238 trillion won, a 17.4% increase from the previous year. This accounts for 48% of the total medical expenses of 2.3369 trillion won.

The average cost per traditional Korean medicine treatment also rose by 11.09% from the previous year to 103,125 won. The daily inpatient treatment cost was 85,690 won, an 8.3% increase from the previous year.

Non-life insurance companies point out that the surge in traditional Korean medicine treatments is leading to increased expenditure burdens on automobile insurance. They criticize that moral hazard among traditional Korean medical institutions and patients is causing excessive treatments even in minor accidents.

There are also criticisms that the fees and recognition standards for non-reimbursable items in traditional Korean medicine treatments are unclear. There are no detailed standards for various traditional Korean treatments such as acupuncture, herbal medicine, moxibustion, and Chuna therapy.

Insurance companies have been demanding the government authorities strengthen management of non-reimbursable traditional Korean medicine treatments, but efforts to establish improvement measures have repeatedly failed due to opposition from the traditional Korean medicine clinic industry. However, last month, the amendment to the Automobile Damage Compensation Guarantee Act passed the National Assembly plenary session, offering a glimmer of opportunity. The amendment stipulates that when setting or changing automobile insurance treatment fee standards, decisions must be made through deliberation by the 'Automobile Insurance Treatment Fee Dispute Mediation Committee.'

An official from the non-life insurance industry said, "It is widespread for traditional Korean medicine clinics to decorate hospital rooms like hotels to inflate hospitalization fees or to focus on expensive non-reimbursable treatments," adding, "If the medical expenses borne by automobile insurance increase, it inevitably leads to a vicious cycle where the costs borne by insurance subscribers also increase."