Controlling 32 Trillion Won Non-Covered Fees Through Major Mixed Treatment Surgery... Behind the Battle for Market Share [Essential Medical Solutions]

‘Pianseong Jeongjaeyoung’ Monetizes Largely Through Mixed Treatment
Need to Create Proper Examples Beyond Cataract and Manual Therapy
Calls for Prior Introduction of Essential Benefit Packages
Government: “Will Prohibit Areas Where No Rebuttal Is Possible”

Editor's NoteThe medical crisis caused by the mass departure of residents has entered its fifteenth day as of the 4th, yet the government and the medical community continue their standoff. There are divergent interpretations on the core policy of medical reform, the ‘solution to the avoidance of essential medical care.’ The two sides sharply differ on the effectiveness of the government’s ‘Essential Medical Care Package’ policy, proposed alongside the increase of 2,000 medical school quotas. In this article, we examine the three key issues related to the government’s solution for essential medical care (① Ban on Mixed Billing ② Special Act on Medical Accident Handling ③ Regional Essential Physician System) and also look into examples of essential medical care policies in advanced countries.

① The $32 trillion non-covered service expansion control link, remaining issues of the ‘Ban on Mixed Billing’

② The core trigger, the Special Act on Medical Accident Handling... Narrowing the gap with medical stakeholders

③ Japan has focused on measures and resolving maldistribution since the 1970s... Lessons for Korea

④ Concerns over the ‘closure’ of Seonam Medical School... To ensure effectiveness of the Regional Essential Physician System

Advanced countries strongly regulate non-reimbursable medical services overall by prohibiting mixed billing. Japan, in principle, bans mixed billing. In Germany, if non-reimbursable treatment is necessary, patients must submit supporting documents from their doctors and apply for prior approval from public insurance. In Australia, the government sets the prices for non-reimbursable services.

Banning ‘mixed billing,’ which combines non-covered services (treatments not covered by health insurance) and covered services (treatments covered by health insurance) in medical billing, is seen as taking away doctors’ livelihoods, making it the most sensitive part of solving the essential medical care issue. Many so-called popular departments such as ‘Pianseongjeongjaeyeong’ (Dermatology, Ophthalmology, Plastic Surgery, Psychiatry, Rehabilitation Medicine, Radiology) currently have a structure where it is easy to earn money through mixed billing. In the medical community, there is even public opinion that “the ban on mixed billing will have a bigger impact on income than increasing medical school quotas.”

For example, banning ‘bundled’ mixed billing practices such as inserting multifocal lenses (non-covered) during cataract surgery (covered) or recommending manual therapy (non-covered) alongside physical therapy (covered). The government plans to control the rapidly expanding non-covered medical service market through this. The aim is to tighten the oversupply to the so-called popular departments (Pianseongjeongjaeyeong) that act like black holes attracting doctors.

There have been continuous criticisms that allowing mixed billing without control mechanisms has increased non-covered items alongside covered ones, leading to unnecessary medical expenses and disrupting the medical ecosystem. Profits have concentrated in non-essential medical fields, eroding even the health insurance finances, while essential medical care has been allocated fewer resources. Accordingly, the government plans to invest 10 trillion won by 2028 to raise fees for essential medical care (emergency, childbirth, severe diseases, pediatrics) and simultaneously tighten the reins on the expanding non-covered services by wielding the ‘ban on mixed billing’ as a control measure.

According to the Ministry of Health and Welfare, patients' out-of-pocket expenses for non-covered services increased from 17.7139 trillion won in 2013 to 32.3213 trillion won in 2022.

However, so far only the ban on mixed billing for ‘non-severe excessive non-covered services’ has been announced, and there remain many issues to consider, such as the scope and criteria of mixed billing to be regulated and whether necessary treatments for patients might be restricted. The Presidential Commission on Medical Reform is working on detailed plans regarding the ban on mixed billing, but social consensus and coordination are needed on the complex issues that must be examined case by case.

Establishing Coverage Baselines through Standard Treatment Packages First

Professor Yoon Seok-jun of Korea University’s Department of Preventive Medicine (Dean of the Graduate School of Public Health) told this publication in a phone interview, “I agree in principle with the major proposition of reducing non-covered services (through the ban on mixed billing).” However, he emphasized, “It is necessary to first establish a baseline for what will be covered within the covered items through a ‘standard treatment package’ to clearly define the boundaries of the ban on mixed billing.” He cited varicose vein surgery as an example. Some patients undergo varicose vein surgery for health functional purposes, while others may choose surgery for cosmetic reasons. In the latter case, it would be reasonable to classify it as non-covered, but there are many borderline areas when looking at the surgery itself. Professor Yoon noted, “The Netherlands has well-organized standard coverage packages. Clarifying the ambiguous boundaries between covered and non-covered services will make the ban on mixed billing policy effective.”

If the baseline for coverage areas between covered and non-covered services, and what should be covered by health insurance versus handled by private insurance, is not properly established, it will be difficult to implement the policy immediately in medical settings. There is also a risk of repeating the failure of the Moon Jae-in administration’s ‘Mooncare’ (health insurance coverage expansion policy), which hastily pushed for ‘coverage of all non-covered services.’ This reflection is also found in Ministry of Health and Welfare documents. The Ministry stated, “Due to focusing on coverage of all medical areas without considering the priority of coverage, insufficient investment in essential medical care caused gaps in severe and emergency medical care” . The government directly mentioned that including items that should not be covered among non-covered services led ‘Mooncare’ to encourage over-treatment and medical shopping. A representative example is including brain and cerebrovascular MRI in covered items, which significantly increased unnecessary over-treatment and became a drain on health insurance finances.

Minister of Health and Welfare Cho Kyu-hong is announcing the plan to expand medical school admissions quotas on the 6th at the Government Seoul Office in Jongno-gu, Seoul. Photo by Jo Yong-jun jun21@

Ensuring Consistency Across Health Insurance Policies... The Medical Reform Commission Must Pursue Social Consensus

Professor Park Eun-cheol of Yonsei University’s Department of Preventive Medicine also stated, “The ‘ban on mixed billing’ is necessary to increase the public share of national medical expenses.” However, he added, “For example, in abdominal surgery, adhesion prevention agents may need to be used depending on the case, but currently, these are non-covered. If such parts fall under the ban on mixed billing, problems arise. If there is even one non-covered item, the entire treatment is considered mixed billing. It will take considerable time to organize and distinguish borderline treatment subjects that fall between non-covered and covered selective coverage.”

There is also a diagnosis that institutional consistency across overall health insurance policies is important alongside the ban on mixed billing. Policy Director Jeon Jin-han of the Health and Medical Organizations Coalition said, “Policy coherence is important, but the government’s Comprehensive Health Insurance Plan includes provisions to fully ease entry barriers for innovative medical technologies used as non-covered services.” He added, “Institutional design must avoid conflicts to ensure the policy effectiveness of the ban on mixed billing.”

Lim Hye-sung, Director of Essential Medical Care at the Ministry of Health and Welfare, stated at a forum hosted by the National Health Insurance Labor Union on the 29th of last month, “The ban on mixed billing will start by prohibiting parts that are abused without therapeutic nature or medical effect and are difficult to dispute.” She added, “We will achieve social consensus through the Medical Reform Special Committee’s consultative body.”