“South Korea has a relatively low, but rapidly growing, level of health expenditure compared to other OECD [Organization for Economic Cooperation and Development] countries (Ko, 2008).16 Total health care expenditure has risen steadily from about 4.4% in 1990 to 6.8% of gross domestic product (GDP) in 2007. Table 3.1 shows that the amount spent on health care has risen in both absolute and relative terms, with total health expenditure growing rapidly. This growth was more pronounced in public health expenditure, which steadily increased its share of total health expenditure. Despite this increase, public sources of spending as a proportion of total health expenditure are still lower than in other OECD countries. According to the OECD report, South Korea is in the group with the lowest public health expenditure, which includes Turkey, Mexico, Poland and Slovakia (OECD, 2009).
“While the share of GDP [Gross Domestic Product] represented by health expenditure (4.4% in 1990) is below the level that would be expected for an OECD country with South Korea’s standard of living, real health expenditure per capita has increased rapidly and above real GDP per capita for almost the entire period between 1990 and 2007. This growth in real per capita health expenditure can be explained almost wholly by volume increases up until the mid-1990s, as the government kept increases in the price of health services and medical fees below general price increases. Of total health expenditure, the outpatient share (33.6%) was large, while the inpatient share (27.9%) was lower than the OECD average; the drug share (24.7%) also was relatively high (OECD, 2009).
“Table 3.1 shows the percentage of total health expenditure financed through public and private sources. Public expenditure, which comes mainly from contributions, includes direct care provision (e.g. MAP [Medical Aid Programme] for the poor) from government and subsidies to the NHI [National Health Insurance]. Private expenditure mainly includes OOP [Out Of Pocket] payments and voluntary (private) health insurance. OOP payments were about 35.7% of total health expenditure in 2007.
“The growth in public health expenditure was mainly a result of expenditure increases in the NHI scheme. In addition to this, the government has tried to expand the benefit package under the NHI, leading inevitably to increases in NHI expenditure (see Chapter 7).”
Source: Chun C-B, Kim S-Y, Lee J-Y, Lee S-Y. Republic of Korea: Health system review. Health Systems in Transition, 2009; 11(7):1–184. http://www.euro.who.int/en/about-us/partners/observatory/publications/health-system-reviews-hits/full-list-of-country-hits/republic-of-korea-hit-2009
