Analyzing the Historical Development and Transition of the Korean Health Care System

ABSTRACT

OBJECTIVES: Many economically advanced countries have attempted to minimize public expenditures and pursue privatization based on the principles of neo-liberalism. However, Korea has moved contrary to this global trend. This study examines why and how the Korean health care system was formed, developed, and transformed into an integrated, single-insurer, National Health Insurance (NHI) system. METHODS: We describe the transition in the Korean health care system using an analytical framework that incorporates such critical variables as government economic development strategies and the relationships among social forces, state autonomy, and state power. This study focuses on how the relationships among social forces can change as a nation’s economic development or governing strategy changes in response to changes in international circumstances such as globalization. RESULTS: The corporatist Social Health Insurance (SHI) system (multiple insurers) introduced in 1977 was transformed into the single-insurer NHI in July 2000. These changes were influenced externally by globalization and internally by political democratization, keeping Korea’s private-dominant health care provision system unchanged over several decades. CONCLUSION: Major changes such as integration reform occurred, when high levels of state autonomy were ensured. The state’s power (its policy capability), based on health care infrastructures, acts to limit the direction of any change in the health care system because it is very difficult to build the infrastructure for a health care system in a short timeframe.