Finance has been at the center of debates over the President Moon Jae-in’s new healthcare policy, dubbed as “Mooncare,” to drastically expand national health insurance coverage.

The Mooncare aims to raise the national health insurance coverage rate out of the total medical expense from the current 63 percent to 70 percent by 2020, by allowing almost all medical expenses to be covered by the national health insurance.

The Ministry of Health and Welfare estimates that the expansion of the national health insurance will need 30.6 trillion won ($28 billion) by 2022. However, many critics say the figure is an underestimation. They also raise questions whether Mooncare will be feasible.

Lawmakers were so widely divided over how much the government should allocate its budget for the Mooncare that the National Assembly’s committee for health and welfare could not even open a meeting on Nov. 14, when they had to start reviewing the 2018 budget plan for the Ministry of Health and Welfare.

The ruling Democratic Party of Korea argued for an additional 2.69 trillion won to the ministry’s request of 5.42 trillion-on budget, but the main opposition Liberty Korea Party opposed it.

Experts note that the debate over Mooncare excessively centers on the budget issue. They point out that the biggest problem in Mooncare is not an underestimation of a budget but a lack of measures to curb the Korean people’s overuse of medical care.

Yoon Suk-joon, a professor at the Preventive Medicine Department of Korea University’s College of Medicine, talks about “Mooncare,” during an interview with Korea Biomedical Review.

In an interview with Korea Biomedical Review, Yoon Suk-joon, a professor at the Preventive Medicine Department of Korea University’s College of Medicine, said the government could secure up to 54.4 trillion won in national health insurance revenue, based on the government’s financing plan.

However, if the government fails to reduce the overuse of healthcare service, it will fail to financially support Mooncare, even with a 54.4 trillion won from national health insurance revenue, Yoon said. He previously served as executive director of the Health Insurance Review & Assessment Service and head of the HIRA’s research institute.

To achieve the goal of reaching 70 percent in national health insurance coverage, the proportion of public financing should go up from the current 56 percent to 64 percent, Yoon said, adding that he estimated the revenue of national health insurance based on this scenario.

According to OECD’s Health Data, Germany’s ratio of the government spending to the total healthcare spending stays highest at 84.6 percent, followed by Japan with 84.1 percent, the U.K. with 79.2 percent, and France with 78.8 percent.

However, Korea’s ratio of state spending to the total medical expenditure remains low at 56.4 percent, lower than the OECD’s average of 72.5 percent. Its national health insurance rate is 6.12 percent, much lower than Germany’s 15.5 percent, and the U.K.’s 12 percent.

Yoon estimated the total income of national health insurance, based on the Ministry of Health and Welfare’s scenarios on accumulated revenue of national health insurance, a hike in national health insurance rate, and an expanded fiscal support for healthcare.

On a scenario that the government spends 10 trillion won out of the 20 trillion won in accumulated national health insurance revenue, retains the insurance rate at 3.2 percent per year, and expands the fiscal support ratio for healthcare from 13.8 percent to 17 percent, the government can secure 85.4 trillion won in national health insurance revenue, Yoon said. If the government spends all of the 20 trillion won in accumulated revenue of national health insurance, it can raise the maximum of 95.4 trillion won in national health insurance revenue, he said.

Yoon’s estimation is triple the size of the government’s estimate of 30.6 trillion won spending to enhance health insurance coverage by 2022. However, Yoon said his figure was not overblown, considering the rising trend of Korean people’s medical spending in the past five years.

The total medical spending in Korea has continued to go up by 7.5 percent annually in the past five years. If the trend continues, the medical spending will rise to 193 trillion won in 2022 from 125 trillion won last year. If the government can cover up to 64 percent of the total medical spending, it will have to take out 104 trillion won from national health insurance revenue for the government spending out of a total medical spending of 193 trillion won in 2022. The 104 trillion won is larger than the maximum national health insurance income of 95.4 trillion won.

The calculation is based on the assumption that the total medical spending will not increase at a faster pace in the next five years than that in the past. If the medical spending increases by 10 percent per year, it will reach 222 trillion won in 2022, and 120 trillion won should be financed through national health insurance revenue.

The only way to make ends meet is to limit the annual growth rate of Korean people’s medical spending within 5 percent, Yoon emphasized. Based on a 5 percent yearly growth, the medical spending will stand at 168 trillion won in 2022, and 90 trillion won can be financed through national health insurance revenue, he said.

‘Guarantee proper reimbursement, and control overuse of healthcare’

Yoon said Mooncare’s success would hinge on whether the government can reduce overuse of healthcare service. Throughout the interview, he emphasized that Mooncare would need a “restructuring,” should its goal of covering almost all medical expenses remains feasible.

“The policy is going in the right direction to enhance the coverage of national health insurance. The problem is, if people feel that the system reduces their financial burdens of medical spending, their medical use will naturally increase. But the government does not have any measure to control them,” Yoon said. “Even if the medical spending’s annual growth rate remains at the current level of 7.5 percent, the government will need more money than the maximum revenue of national health insurance, to cover the medical spending.”

Yoon suggested the government comes up with a way to slow down the growth pace of medical spending, if it wants to raise the national health insurance’s reimbursement rate to 70 percent, and lift up the ratio of government spending to the medical spending to 64 percent.

“Whether it is the medical delivery system or reimbursement system, Korea needs a restructuring to restrict the overuse of healthcare service,” he said.

“If the government announces that it will bring down the use of medical care, which is now quite liberally available, it may face resistance from the public. This is why political leadership is important. Even if they lose votes, they should get the message to the public that all of the Korean people should take the burden equally and make concerted efforts,” he said.

Yoon added that a government policy to reduce the overuse of medical care should be something that medical community can cooperate, as they are the suppliers of medical service.

“Since the government’s announcement of Mooncare, the medical community has been raising suspicion that the government might try to make physicians sacrifice for its policy. As President Moon said, the government should guarantee a certain level of reimbursement for physicians and curb the use of medical care. It is important to win trust from physicians in these issues,” he said.

The currently available tool to reduce the use of medical care is to provide different reimbursement prices for different kinds of medical institutions – primary, secondary, and tertiary hospitals, Yoon said. However, such tool is not effective enough to invoke changes in the pattern of using healthcare, he said.

“Unless the government overhauls the medical delivery system and reimbursement system, it cannot draw up a future-oriented healthcare policy. Without changes, Mooncare will end up as just another pork-barrel policy to enhance health insurance coverage that comes out every time there is a regime change,” Yoon said.

Yoon stressed that the government should contain the abnormal increase in the medical market not covered by national insurance. To do so, reimbursement for mom-and-pop clinics should be raised so that they can make money by providing only health insurance-covered medical service. “The medical service industry is opposed to Mooncare because they don’t trust the government, thinking they might have to give up profits that come from non-reimbursement medical care,” he said.

To restore their trust, the government should make efforts to guarantee their profits with proper reimbursement policy, Yoon added.

“At the clinic level, reimbursement should be drastically lifted so that physicians can examine each patient for more than 10 minutes and still make money,” he said.

As for the Korean Medical Association’s upcoming rally to protest against Mooncare, Yoon suggested the KMA participate in the government’s forum and aggressively present its requests and win them.

soo331@docdocdoc.co.kr

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