Securing patient access to new medical technology under the diagnosis-related group system in South Korea: a review of foreign policies and selective reimbursement coverage programs for 4 major conditions

The Korean government operates a fee-for-service system, as well as a diagnosis-related group (DRG) payment system that only applies to 7 different specific disease groups. To control rapidly increasing health expenditures, the Korean government adopted a compulsory DRG payment system for 7 disease groups in 2013. However, the current Korean DRG (K-DRG) system does not address the cost of new medical technologies and accompanying services, whereas the United States and European countries have implemented incentive systems within the DRG payment system to promote technological innovations. The Korean government is expanding the accessibility of new medical technologies to strengthen the coverage of 4 major conditions with a selective reimbursement system, but the K-DRG system is inconsistent with the selective reimbursement system in terms of adopting new medical technology. Such inconsistency is clearly shown in the case of advanced energy devices that are essential for surgical procedures. Despite their clinical usefulness and the high demand for such instruments, there is little space for compensation for advanced energy devices in DRG groups. Neither healthcare providers nor patients can choose selectively reimbursed medical devices under the current DRG system, leading to unequal healthcare benefits among patient groups. This paper proposes additional payments for new medical technology that is costly but clinically effective to ensure patient access to new medical technology under the K-DRG system, and suggests that a fair and consistent policy would be to apply the selective reimbursement of medical services in K-DRG.

Securing patient access to new medical technology under the diagnosis-related group system in South Korea: a review of foreign policies and selective reimbursement coverage programs for 4 major conditions

The Korean government operates a fee-for-service system, as well as a diagnosis-related group (DRG) payment system that only applies to 7 different specific disease groups. To control rapidly increasing health expenditures, the Korean government adopted a compulsory DRG payment system for 7 disease groups in 2013. However, the current Korean DRG (K-DRG) system does not address the cost of new medical technologies and accompanying services, whereas the United States and European countries have implemented incentive systems within the DRG payment system to promote technological innovations. The Korean government is expanding the accessibility of new medical technologies to strengthen the coverage of 4 major conditions with a selective reimbursement system, but the K-DRG system is inconsistent with the selective reimbursement system in terms of adopting new medical technology. Such inconsistency is clearly shown in the case of advanced energy devices that are essential for surgical procedures. Despite their clinical usefulness and the high demand for such instruments, there is little space for compensation for advanced energy devices in DRG groups. Neither healthcare providers nor patients can choose selectively reimbursed medical devices under the current DRG system, leading to unequal healthcare benefits among patient groups. This paper proposes additional payments for new medical technology that is costly but clinically effective to ensure patient access to new medical technology under the K-DRG system, and suggests that a fair and consistent policy would be to apply the selective reimbursement of medical services in K-DRG.