[Exclusive] About 40 New Medical Technologies Flood the Market Each Year... Barriers to Non-Reimbursed Treatments Loosen Further

The New Health Technology Assessment System:
Ambiguous MOHW Notices Fuel Non-Reimbursed Service Misuse
Expansion of Pre-Market Entry Medical Technologies:
Non-Reimbursed Treatments to Surge Starting September
Rising Patient Medical Costs ... Indemnity Insurance Deficits ... Premium Hikes for All in a Vicious Cycle

'Knee stem cell injection,' 'prostate artery embolization,' 'HIFU.'

These are examples of non-reimbursed medical technologies that have recently been cited as major causes of deficits in indemnity health insurance. All of these non-reimbursed treatments entered the market through the government's New Health Technology Assessment (NHTA) system and quickly became popular. However, due to institutional limitations, proper management of non-reimbursed services has not been implemented, leading to various types of insurance fraud and negatively impacting the financial health of indemnity insurance.

About 40 new health technologies enter the market each year... Ambiguous 'notices' lead to frequent misuse

The New Health Technology Assessment system was introduced in 2007 to evaluate the safety and efficacy of new medical technologies. For a medical institution to have a new technology recognized as a new health technology, several procedures must be followed. First, an application is submitted to the National Evidence-based Healthcare Collaborating Agency (NECA), after which the New Health Technology Assessment Committee convenes. The committee evaluates clinical safety and efficacy, and the Health Insurance Review and Assessment Service (HIRA) assesses cost-effectiveness and appropriateness for reimbursement. If safety and efficacy are proven but the technology fails to qualify for reimbursement, it becomes a non-reimbursed service. After the Ministry of Health and Welfare (MOHW) announces that the technology is recognized as a new health technology, it can be used in the market.

According to data obtained by Asia Economy from Democratic Party lawmaker Kim Yoon, there were 656 applications for new health technology assessment by medical institutions from 2020 to last year. Of these, 38% (247 cases) entered the market and are currently in use. Another 25% (168 cases) remain in the research stage, 1% (5 cases) are under evaluation, and 36% (236 cases) were withdrawn or rejected. In the first half of this year, 53 applications were submitted, with 6 entering the market, 23 under evaluation, and 24 withdrawn or rejected.

Every year, about 130 applications for new health technologies are submitted, and on average, about 40 new technologies enter the market. However, due to the ambiguity of MOHW notices, there are many cases of misuse. This is because the method of use, scope of application, and responsible practitioners for new health technologies are not clearly defined. As a result, medical institutions may arbitrarily perform treatments, and when patients claim indemnity insurance, insurers may deny the claims, leading to a vicious cycle of complaints and lawsuits.

Knee stem cell injection is a representative example. According to the MOHW notice on adipose tissue knee injections, the procedure is described only as "injecting autologous adipose-derived stromal vascular fraction, separated and extracted from the patient's abdomen or buttocks, into the knee joint cavity after confirming leakage of synovial fluid (limited to single injection only)." The condition "limited to single injection only" was added to prevent the abuse of combined (mixed) treatments. Many medical institutions previously inflated medical expenses by combining bone marrow knee injections, which had been designated as a new health technology earlier, with knee surgery. However, the MOHW notice does not specify how much time should elapse between single injections, resulting in further confusion.

Insurance company A reported a case where a patient was hospitalized, underwent knee surgery over two days, received an adipose tissue knee injection, and then claimed insurance benefits. Insurance company A, citing the MOHW notice, paid only for the knee surgery. Another patient received knee surgery and about a week later received an adipose tissue knee injection, then claimed insurance for both. Insurance company A, uncertain whether this constituted combined treatment, inquired with the financial authorities, who responded that it would be appropriate to pay the full insurance amount. An official from insurance company A lamented, "The lack of clear criteria for single injections is only increasing complaints and disputes."

The responsible medical specialty for performing these procedures is also not clearly defined, leading to cases where non-specialists perform new health technologies. For example, B Korean Medicine Hospital in Gangseo-gu, Seoul, hired a family medicine doctor to offer a package treatment combining bone marrow knee injections with Korean medicine therapies. According to data obtained by Democratic Party lawmaker Lee Jungmoon, among the top five medical institutions in terms of insurance payouts for bone marrow knee injections from 2022 to the first half of this year, the first and fourth highest were Korean Medicine Hospitals.

Other procedures such as 'prostate artery embolization,' 'laser treatment for onychomycosis,' and 'HIFU' also lack clear usage standards as new health technologies, resulting in ongoing abuse of non-reimbursed services and frequent disputes.

Despite these issues, the time required to evaluate new health technologies is decreasing each year. According to data obtained from lawmaker Kim's office, the average number of days required for new health technology assessment dropped from 193 days in 2020 to 169 days in 2023, and to just 96 days in the first half of this year.

Expansion of 'pre-market entry medical technologies'... The speed of non-reimbursed adoption accelerates

Although medical technologies that have rapidly entered the market through the New Health Technology Assessment system are causing various side effects, the government and the medical community are accelerating the introduction of new technologies into clinical practice. The most prominent example is the pre-market entry medical technology system. This system allows the use of medical devices or procedures with low safety concerns before they are officially recognized as new health technologies. Related systems introduced over the years include the Limited Medical Technology Assessment System (2014), Deferred New Health Technology Assessment System (2015), Innovative Medical Technology Assessment System (2019), and Integrated Review System for Innovative Medical Devices (2022).

A comprehensive review of pre-market entry medical technologies announced by the MOHW from July 2016 to October last year shows a total of 87 cases. Of these, 10 were later withdrawn, and as of October last year, 77 remained in effect. Technologies registered as pre-market entry medical technologies mainly include AI-based prognosis prediction and interpretation support devices, 3D printing and robotic assistive devices, and digital therapeutics (DTx) such as wearable devices.

The problem is that medical procedures using these devices, which often lack robust clinical evidence, are being performed indiscriminately not only at tertiary hospitals but also at primary care clinics. Most of these are expensive, non-reimbursed services. Patients are lured by doctors' recommendations or advertisements touting "AI new technology" or "innovative medical technology," receive these non-reimbursed treatments, and then file indemnity insurance claims. Insurers, in an effort to prevent further deterioration of indemnity insurance loss ratios, respond by raising premiums, ultimately resulting in losses for honest policyholders.

Some medical institutions exploit the pre-market entry system by switching between different systems to extend the period during which they can offer non-reimbursed services. Seo Joonbum, a professor at Asan Medical Center in Seoul, pointed out, "The biggest problem with the pre-market entry medical technology system is that it allows movement between systems. For example, a provider can bill for three years as a non-reimbursed service under the Innovative Medical Technology Assessment System, and if it appears likely to be rejected upon re-evaluation, they can switch to the Deferred New Health Technology Assessment System and continue to bill non-reimbursed for another four years."

Furthermore, starting September 1, a new "immediate market entry medical technology system" will be implemented as part of the expansion of pre-market entry medical technologies, which will further accelerate the speed at which non-reimbursed medical technologies enter the market. Previously, the process required sequential approval from the Ministry of Food and Drug Safety (80 days), HIRA's confirmation of existing health insurance technologies (30-60 days), NECA's new health technology assessment (250 days), and HIRA's evaluation of reimbursement appropriateness (100 days), potentially taking up to 490 days. With the immediate market entry system, this process will be streamlined to just 80-140 days.

Once the immediate market entry system is implemented, 140 items incorporating new health technologies?such as digital therapeutics, in vitro diagnostic devices, AI diagnostic support devices, and medical robots?will be able to enter the non-reimbursed market immediately with only approval from the Ministry of Food and Drug Safety. Both the medical and insurance industries agree that once these devices are widely adopted, patients will face many costs whose origins are unclear even to themselves.

AI diagnostic support devices are most frequently cited. These devices monitor vital signs using AI and alert medical staff to abnormalities. Currently, each hospital bed is equipped with devices that monitor blood pressure, pulse, respiratory rate, and body temperature, which are checked regularly by doctors or nurses to assess patient status. With the immediate market entry system, many medical institutions are expected to install AI diagnostic support devices alongside existing vital sign monitors. However, given the lack of clinical evidence, and the fact that these devices would be used not only for critically ill patients who require frequent monitoring but for all general patients, there is a high likelihood that medical costs will be inflated. This is why there is significant opposition within the medical community. Choi Joonil, Director of Policy Research at the Korean Society of Radiology and professor of radiology at Seoul St. Mary's Hospital, Catholic University, stated, "In a system where devices like AI diagnostic support tools are automatically applied to all images before a doctor's medical judgment, it is difficult to limit usage, and these devices may be widely used for commercial purposes even without verified clinical efficacy. This increases the financial burden on patients and is likely to lead to excessive indemnity insurance claims."

Editor's NoteThe rapid adoption of new health technologies and advanced regenerative medicine in clinical practice is a hot topic in the medical field. There are high expectations that advances in technologies such as stem cells, gene therapy, and artificial intelligence (AI) will open new breakthroughs for the treatment of rare, severe, and intractable diseases. The government is also significantly improving access to these technologies through new systems. However, where there is light, there is also shadow. Some medical institutions are promoting expensive treatments using unproven technologies or encouraging excessive indemnity insurance claims. Patients, driven by desperation to recover, choose cutting-edge medical technologies, but this often leads to excessive medical billing and deterioration of insurance finances. This, in turn, results in higher premiums for the majority of honest policyholders. The government's non-reimbursed and indemnity insurance reform plan announced earlier this year is insufficient to address these problems. Asia Economy has examined the realities of the clinical adoption of cutting-edge medical technologies and explored possible solutions.