[Inside Chodong]Unpredictable Medical Ecosystem in South Korea

1970s Low-Fee Medical Insurance System
High-Volume, Low-Margin Treatment and Rise in Non-Covered Procedures
Medical Crisis Raises Concerns Over Damage to Healthcare System

"Our country introduced the National Health Insurance system in 1977, and for about 50 years, the social medical system has been operating stably and efficiently. However, this time, due to the issue of increasing medical school quotas, a medical crisis has occurred, raising concerns about significant damage to the healthcare system."

This was said by Kim Jong-in, former Emergency Committee Chairman of the People Power Party, who shared his story of being refused treatment at more than 20 emergency rooms during the early morning hours after suffering a forehead injury from a fall. He expressed his frustration that an elderly man in his 80s was bleeding from the head but could not receive immediate treatment, pointing out problems with the government's ongoing medical reform. While many agree with his concerns, there is one point that needs to be addressed: our National Health Insurance system is not in a truly normal state.

The predecessor of the National Health Insurance, the Medical Insurance system, was introduced in 1977. At a time when the per capita national income was only $1,000, to solve the problem of insufficient resources, medical insurance was designed with a 'low fee, low burden, low benefit' structure. When the government set insurance fees at only 50% of the customary fees, doctors strongly opposed it, but under the harsh Yushin regime, it was swiftly enforced. The nationwide medical insurance system was established rapidly, within just 12 years, by 1989. Hospitals focused on seeing many patients to compensate for the extremely low fees, and patients, with lowered hospital barriers, visited more frequently. It was even said that "doctors gained experience and their skills improved remarkably because they saw so many patients." Undoubtedly, South Korea's medical standards and National Health Insurance system reached a top level in a short time, envied by other advanced countries.

The problem is that this was not the original direction intended by the government’s medical policy. The government planned to gradually raise insurance premiums, fees, and benefit rates to appropriate levels as more people joined the medical insurance. However, even after income levels rose, the low-margin, high-volume treatment continued, and expensive 'non-covered' items not guaranteed by health insurance became a means for hospitals to cover deficits. Each administration toyed with reforming the National Health Insurance system but, fearing public opinion, never cut into the festering system. The fact that world-renowned large hospitals are maintained on resident doctors’ salaries below minimum wage, and that streets are lined with skin care clinics offering only non-insurance procedures, was likely an unforeseen outcome for past government officials and doctors alike. On top of this, structural limitations accumulated over decades?such as avoidance of essential medical care and collapse of regional healthcare?have overloaded the entire medical system. When the government announced an increase of 2,000 medical school quotas earlier this year, all these issues exploded at once.

When implementing policies directly related to people’s livelihoods, it is essential first to persuade the public with a clear direction and scenarios based on accurate forecasts of expected policy effects. However, the government continues to repeat pledges like "Residents, please come back" and "We will steadily complete unwavering medical reform," while only offering hollow measures such as 'specialist and physician assistant (PA) nurse-centered hospitals' and 'temporary emergency room consultation fee surcharges.' What is clear is that just as the low-fee medical insurance system of the 1970s created an unimaginable medical environment today, after enduring six months of medical crisis and whatever medical gaps lie ahead, South Korea’s medical ecosystem will have changed in ways we did not expect. The outcome of this will directly affect the health and lives of the people."