Orthopedic Clinics Account for 22.3%, Ranking First Among 29 Specialties
Otolaryngology Sees 20.9% Increase Compared to Last Year
"Need for Price Management and Regulatory Measures for Non-Reimbursable Treatments"
This year, the five major non-life insurance companies in South Korea paid out nearly 8.5 trillion won in indemnity health insurance claims, marking a sharp 13.1% increase compared to last year. Among medical specialties, orthopedic clinics-which focus on non-reimbursable physical therapies such as manual therapy and extracorporeal shockwave therapy-accounted for the overwhelming majority of insurance payouts.
According to the five major non-life insurers (Samsung Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance, KB Insurance, and Meritz Fire & Marine Insurance) as of December 15, orthopedic clinics recorded the highest payout among 29 medical specialties, totaling 1.8906 trillion won, which represents 22.3% of the overall amount. Notably, the proportion of non-reimbursable treatments among these payments reached 70.4%, significantly higher than the average. This high proportion is attributed to the concentration of non-reimbursable physical therapy treatments such as manual therapy and extracorporeal shockwave therapy.
In addition to core specialties such as internal medicine, surgery, and obstetrics and gynecology, many specialties with high proportions of non-reimbursable treatments ranked high in indemnity insurance payouts. Family medicine, which ranked seventh (400.2 billion won, 4.7%), is a prime example.
Due to the widespread use of manual therapy and non-reimbursable injection treatments, the non-reimbursable proportion in family medicine reached a top-tier level of 71.0%. Similarly, anesthesiology and pain medicine (273.2 billion won, 3.2%) and rehabilitation medicine (206.19 billion won, 3.1%) also had high non-reimbursable proportions of 68.8% and 66.3%, respectively.
Otolaryngology (250.8 billion won) saw a 20.9% increase compared to the same period last year. This is interpreted as a result of increased use of non-reimbursable injections for the treatment of illnesses such as influenza and the common cold.
Urology (208.9 billion won) experienced a 37.6% surge compared to last year. This increase is due to more insurance claims being filed for high-cost new medical technologies, such as prostate artery embolization.
The excessive use of non-reimbursable physical therapies and injections has been identified as a major cause of indemnity insurance claim leakage. According to the Korea Insurance Research Institute, out of a total of 12.9 trillion won in insurance payouts by all non-life insurers last year, 2.2903 trillion won was for physical therapies (manual therapy, extracorporeal shockwave therapy, and proliferative therapy), and 652.5 billion won was for non-reimbursable injections. These account for approximately 23% of all insurance payouts.
Payouts for indemnity insurance claims at Korean medicine hospitals also reached 358.2 billion won, a 16.9% increase compared to the same period last year. This is attributed to the inclusion of Korean herbal medicine and other Korean medicine services in the national health insurance system, as well as the expansion of collaborative care between Western and Korean medicine.
As indemnity insurance claims continue to rise, the loss ratio for first to fourth-generation indemnity health insurance products at non-life insurers stood at 120.7% as of the third quarter this year, up 3.7 percentage points from the end of last year. In the industry, a loss ratio of 100% is generally considered the break-even point.
With the loss ratio continuing to deteriorate, financial authorities are preparing to introduce fifth-generation indemnity health insurance, which will differentiate coverage by classifying non-reimbursable items as either severe or non-severe, and increase the out-of-pocket rate for non-severe, non-reimbursable treatments to as much as 50%. In addition, as controversy over excessive non-reimbursable treatments persists, authorities have recently decided to designate three medical procedures, including manual therapy, as managed benefits.
The managed benefit system is designed to increase social benefits by reducing the public’s medical expenses. When management is deemed necessary to ensure appropriate medical use, the relevant medical procedures are designated as "preliminary" health insurance items, making them eligible for reimbursement under the national health insurance system.
Industry stakeholders are also calling for the prompt establishment of price management and regulatory measures for non-reimbursable treatments. They argue that the use of standard names and codes, as announced by the Ministry of Health and Welfare, should be made legally mandatory for non-reimbursable items, and that consumers’ rights to choose regarding non-reimbursable treatments should be strengthened.
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