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?

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.