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?

Kyu Sik Lee; Bo Ryung Ahn

doi:10.5124/jkma.2011.54.12.1306

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Lee and Ahn: 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?

Special Contribution

Journal of the Korean Medical Association

Journal of the Korean Medical Association 2011; 54(12): 1306-1318.

Published online: 13 December 2011

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

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?

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 22 August 2011 Accepted 8 September 2011

(open-access):

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.

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

Figures and Tables

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].

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