The late Prof. Byung Yik Kim's suggestions on financial stability of the Korea's national health insurance in 2001 and 2002: what is changed in 10 years?

Article information

J Korean Med Assoc. 2011;54(12):1306-1318

Publication date (electronic) : 2011 December 13

doi : https://doi.org/10.5124/jkma.2011.54.12.1306

Kyu Sik Lee, PhD , Bo Ryung Ahn, PhD, student

Department of Health Administration, Yonsei University, Wonju, Korea.

Corresponding author: Kyu Sik Lee, kslee02@yahoo.co.kr

Received 2011 August 22; Accepted 2011 September 08.

Abstract

The late Professor Byung Yik Kim published an analysis of the financial crisis of Korea's National Health Insurance (NHI) in 2001, which derived from the introduction of the separation of prescribing and dispensing. Subsequently, Kim published another paper on policy suggestions to achieve financial stability of the national health insurance in 2002. In his paper of 2001, he had analyzed two causes of the crisis. First, the stepwise integration of health insurance funds had brought about financial instability since 1998, when regional health insurance funds were integrated into one fund. Second, the introduction of the separation of prescribing and dispensing without recognition of financial instability led to financial crisis. In his 2002 paper, he proposed several policy recommendations, including postpone of financial integration among insurance funds, increasing government subsidies, introducing new financing sources for health insurance, such as an alcohol tax, and implementing cost-containment policies. This paper reviews what was changed in accordance with his policy suggestions over the past 10 years. Many policymakers agreed with his analysis on the causes of financial crisis, however, they did not accept his policy recommendations. Consequently, the Korea National Health Insurance is still financially unstable.

Keywords: Financial crisis; Financial integration; Separation of prescribing and dispensing

References

1. Kim DS. 'May bankruptcy' crisis of health insurance 2001. 03. 09. Chosunilbo;

2. Kim BY. Inje University Graduate School of Public Health. Financial crisis of health insurance: what is the cause? Seminar on the causes and suggestions about the health insurance financial crisis 2001. 2001 April 20; Seoul, Korea. 1–19.

3. Kim YI. The necessity and alternative of integrated & unified health care security system 1994. Seoul: Administrative Renovation Commission;

4. Kim YI, Moon OR. Desirable system for management of the health insurance association. Hangyoreh Forum. Hangyoreh Newspaper 1994. 11. 18.

5. Kim YI. The root causes of corruption in the medicines [Internet] 1998. cited 2011 Dec 1. Seoul: People's Solidarity for Participation Democracy; Available from: http://info.peoplepower21.org/pub-html/725.html.

6. Jung SW, Lee TJ, Cho BH. Market competition structure after original drug patent expiry. Korean J Health Econ Policy 2008. 141–25.

7. Kim BY. Financial soundness of the health insurance. Health & Welfare Forum. Policy forum on the health insurance normalization plan for advanced health care 2002. 2002 Sep 6; Seoul, Korea. 99–138.

8. Choi BH. Evaluation on the financial crisis of the national health insurance. Korean Soc Secur Stud 2002. 1837–66.

9. Jeong WJ. A study of insurance reimbursement fees related to the separation of prescribing and dispensing 1998. Seoul: Korea Institute for Health and Social Affairs;

10. Kim BY. Financial bankruptcy of health insurance in Korea. Bogeongyeongjeyeongu 2002. 8153–182.

11. Press release [internet]. Ministry of Health & Welfare 2010.11.15, 2011.11.22. Seoul: Available from: http://www.mw.go.kr/front/al/sal0301vw.jsp?PAR_MENU_ID=04&MENU_ID=0403&CONT_SEQ=260540&page=3.

12. National Health Insurance Cooperaton. Major statistics of national health Insurance 2009 2010. Seoul: Segwang Press; 29.

13. National Health Insurance Cooperaton Homepage Available from: http://www.nhic.or.kr/english/insurance/insurance04.html.

14. Lee KS. Financing and delivering health care 2002. Seoul: Gyechuk Cultural Press;

15. Jones RS. Health care reform in Korea: OECD Economics Department working papers no. 797 [Internet] 2010. cited 2011 Nov 17. Paris: OECD Publishing; Available from: http://www.oecd-ilibrary.org/economics/health-care-reform-in-korea_5kmbhk53x7nt-en.

16. Lee YJ. Equity in health care utilization by health status. Korea Soc Policy Rev 2010. 17267–290.

17. National Health Insurance Corporation. An analysis of health insurance benefits to contributions in 2010 2011. Seoul: National Health Insurance Corporation;

Article information Continued

This is an Open-Access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/3.0) which permits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited.

Table 1

Estimation of 2001 health insurance finances status by the National Health Insurance Corporation

Unit: 100 million won.

From Kim BY. Seminar on the causes and suggestions about the health insurance financial crisis; 2001. p.14, with permission from Inje University Graduate School of Public Health [2].

Table 2

Comparison of the increasing rate of benefits and contributions

Unit: 100 million won, %.

From Kim BY. Seminar on the causes and suggestions about the health insurance financial crisis; 2001. p.5~6, with permission from Inje University Graduate School of Public Health [2].

Table 3

Administrative finances by the type of health insurer

Unit: 100 million won (from a year ago, %).

From Kim BY. Seminar on the causes and suggestions about the health insurance financial crisis; 2001. p.6, with permission from Inje University Graduate School of Public Health [2].

SE, self-employees; GT, government employees and private school teachers; WE, industrial workers.

Table 4

Accumulated reserves by the type of health insurer

Unit: 100 million won.

Based on the amount in hand.

From Kim BY. Seminar on the causes and suggestions about the health insurance financial crisis; 2001. p.4, with permission from Inje University Graduate School of Public Health [2].

SE, self-employees; GT, government employees and private school teachers; IW, industrial workers.

Table 5

Changes of monthly average benefits, before and after the introduction of separation of prescribing and dispensing

Unit: 100 million won (%).

Based on the amount in hand.

From Kim BY. Seminar on the causes and suggestions about the health insurance financial crisis; 2001. p.10, with permission from Inje University Graduate School of Public Health [2].

Table 6

Benefit changes, before & after the introduction of separation of prescribing and dispensing

Unit: 100 million won (%).

From Kim BY. Seminar on the causes and suggestions about the health insurance financial crisis; 2001. p.14, with permission from Inje University Graduate School of Public Health [2].

Table 7

Government subsidies by year

Unit: 100 million won %.

From Ministry of Health & Welfare. Press release; 2010.11.15, 2011. 11.22. with permission from bureau of health insurance policy [11].

Table 8

Financial indicators of national health insurance by year

Unit: 100 million won (%).

From Ministry of Health & Welfare. Press release; 2010.11.15, 2011.11.22. with permission from bureau of health insurance policy [11].

^a)Based on cash flows. Other revenue is included contributions.

Table 9

Standard annual wage grades and the rate of contributions by year

Unit: won, %.

From National Health Insurance Cooperaton, National health Insurance yearbook 2009. p.29 [12].

National Health Insurance Cooperaton Homepage [13].

Table 10

Benefits and accumulated reserves by year

Unit: 100 million won (%).

From Ministry of Health & Welfare. Press release; 2010.11.15, 2011.11.22. with permission from bureau of health insurance policy [11].