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World Health Systems Facts

Korea: Health System Overview

Korea: Health System Overview

Health System Overview
Health System Rankings
Health System Outcomes
Coverage and Costs for Consumers
South Korea’s National COVID-19 Policy

Health System Financing and Expenditures
Medical Personnel
Health System Physical Resources and Utilization
Long-Term Care
Medical Training
Pharmaceuticals

Political System
Economic System
Population Demographics
People With Disabilities
Aging
Social Determinants & Health Equity
Health System History and Challenges


Population Insurance Coverage For A Core Set Of Healthcare Services* (%) (2019):
Public Coverage: 100%; Primary Private Health Coverage: 0%; Total: 100%

*“Population coverage for health care is defined here as the share of the population eligible for a core set of health care services – whether through public programmes or primary private health insurance. The set of services is country-specific but usually includes consultations with doctors, tests and examinations, and hospital care. Public coverage includes both national health systems and social health insurance. On national health systems, most of the financing comes from general taxation, whereas in social health insurance systems, financing typically comes from a combination of payroll contributions and taxation. Financing is linked to ability-to-pay. Primary private health insurance refers to insurance coverage for a core set of services, and can be voluntary or mandatory by law (for some or all of the population.”

Source: OECD (2021), Health at a Glance 2021: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/ae3016b9-en.


Annual household out-of-pocket payment, current USD per capita (2019): $794

Source: Global Health Expenditure Database. Health expenditure series. Geneva: World Health Organization. Last accessed July 21, 2022.


Out-of-Pocket Spending as Share of Final Household Consumption (%) (2019): 5.3%

Source: OECD (2021), Health at a Glance 2021: OECD Indicators, OECD Publishing, Paris, https://doi.org/10.1787/ae3016b9-en.


“Republic of Korea (hereafter, Korea) has introduced a national health insurance (NHI) scheme that includes the compulsory coverage of 97% of the population, except those recipients of Medical Aid that protect the accessibility of care for the poor [5]. However, the benefit coverage of NHI is rather low, indicating that the proportion of out-of-pocket (OOP) payments, including copayments for services that have been insured and full payments for uncovered services, is approximately 32.2% of the health expenditure in 2018. This metric is relatively higher than those of Japan (13%), Germany (12.6%), the UK (15.9%), and France (10.2%) [6]. If OOP payments increase excessively, catastrophic consequences for households and the economy may ensue [7]. The World Health Organization (WHO) [8] states that if the ratio of OOP expenses to a household’s ability to pay exceeds a specific threshold, it is considered as “catastrophic health expenditures (CHE),” and this has been adopted as a measure of fairness in financial contribution indicators [8, 9]. Consequently, many studies on CHE have been conducted in Korea for more than a decade, and almost all of these studies have criticized the financial functioning of the Korean NHI scheme, which barely protects households from high OOP expenses [10–12].

“The pricing system of the health care service market in Korea is based on a fee-for-service scheme and NHI is a third-party payer that covers some proportion of medical fees. There are many services in the medical market, most of which are “covered” services managed by NHI, and other “non-covered” services. Notably, NHI covers some proportion of medical costs for services that are covered according to the coinsurance rates, and the rest of the expenses become statutory copayments of patients [13]. At the same time, the patients must make full payments for services such as dental prosthetics, vision correction surgery, manual therapy, and other treatments or medicine based on new health technologies. These uncovered services may have clinical evidence for their treatment effects. However, the NHI does not pay for them due to low economic efficiency or the existence of other alternative medical services.”

Source: Jung, H.W., Kwon, Y.D. & Noh, JW. How public and private health insurance coverage mitigates catastrophic health expenditures in Republic of Korea. BMC Health Serv Res 22, 1042 (2022). https://doi.org/10.1186/s12913-022-08405-4


“The greatest achievement over the past 40 years, since the introduction of Korea’s NHI [National Health Insurance], is the expansion of coverage for the target population. The key success factors of Korea, one of the representative countries that achieved UHC [Universal Health Coverage] within a short period of time, are as follows. The first is changes to the socio-economic conditions. Korea has successfully achieved rapid economic growth by successfully implementing the 5-Year Economic Development Plan (Yoo 2008). There was a strong public demand for health insurance in 1987, and the establishment of the NHI was a promise made during the presidential election. The second factor is the design of health insurance scheme. At launch, health insurance began with low levels of contribution, benefits, and reimbursement owing to the poor financial condition of the government. The current NHI system is the result of expanding coverage systematically, keeping in view individuals with relatively less understanding of the social insurance mechanism. The third contributing factor is the development and implementation of a strategic policy for health insurance. The government imposes mandatory participation, as legal obligation for both insurers and providers, and insurers must provide NHI services. The step-by-step expansion of coverage took into careful consideration the insured’s ability to pay and the insurer’s administrative capacity. By gradually expanding population coverage, Korea established the NHI 12 years after the introducing the health insurance system. Finally, the fourth factor is the use of information technology. In Korea, the government operates the residential identification system. This technology makes efficient management possible, enabling eligibility criteria management, imposition, collection, benefit management, claim review, etc.”

Source: Lee, Y., Kim, S., Kim, S. Y., & Kim, G. (2019). Ethical Consideration of National Health Insurance Reform for Universal Health Coverage in the Republic of Korea. Asian bioethics review, 11(1), 41–56. https://doi.org/10.1007/s41649-019-00079-1.


“As noted thus far, national health insurance finances the Republic of Korea’s health system. The NHI covers about 97% of the population, and the remaining 3% is covered by the Medical Aid Program, a tax-funded program to ensure access to health-care for low-income citizens. In contrast to the public sector-dominant financing, health-care delivery relies heavily on the private sector. This is because the Government has let health-care providers in the private sector directly respond to increases in the demand for health-care that social health insurance has brought about. As of 2012, almost all clinics and about 94% of hospitals were privately owned.

“Public health facilities provide medically necessary services not only for the general public but also target populations at the central, regional, and municipal levels. They include national hospitals, special corporatized public hospitals, regional medical centres, health centres, health subcentres and primary health-care posts.

“Some national hospitals are accountable to the Ministry of Health and Welfare while others are accountable to other ministries. The former include special hospitals such as the National Rehabilitation Center, five psychiatric hospitals, two hospitals for tuberculosis, and one for leprosy. The latter include hospitals targeting specific groups, for example, the National Police Hospital and several hospitals for armed forces. Special corporatized public hospitals, established based on special laws for the public interest, include the National Medical Center, the National Cancer Center and National University Hospitals.

“As of 2012, there were 34 regional medical centres directly under regional governments and 254 health centres accountable to municipalities. Health subcentres and primary health-care posts, numbering 1315 and 1895 respectively as of 2012, provide basic health services in the areas where health centres do not exist or are not easily accessible (MOHW, 2013). There are also hospitals owned by regional governments that provide health services for specific populations such as children, the elderly, and the mentally ill.

“The role and function of health providers is not well differentiated, particularly between clinics and hospitals. Some clinics have inpatient beds while all general hospitals provide outpatient services. There is no gatekeeper in the health-care system. Citizens are not required to register with any health-care provider, even though there are many local clinics. Thus, patients have the freedom to choose health-care provider at any level according to their preference as long as they can afford to pay higher out-of-pocket (OOP) payments in general hospitals and tertiary hospitals. Recently, the concentration of patients in the so-called “big 5” general hospitals has been an issue. The lack of differentiation of health-care providers’ roles and the absence of a gatekeeping system have been highlighted as causes of inefficiency in health-care delivery.”

Source: World Health Organization. Regional Office for the Western Pacific. (‎2015)‎. Republic of Korea health system review. Manila: WHO Regional Office for the Western Pacific.


“Healthcare is financed through National Health Insurance covering the entire population. Other than some of very new and costly technologies, most health-care services, including medical check-ups and cancer screening, are included in the benefits package with relatively high cost-sharing. The role of voluntary health insurance (VHI) in health-care financing is increasing, and its role has been controversial.

“Out-of-pocket (OOP) payments still required in social insurance include co-payments for covered services and full payment for services not included in the benefits package. Patients pay 20% of the cost for insured services in inpatient care, and differential cost-sharing is applied for outpatient care, depending on the level of health provider. The poor are exempted from cost-sharing at the point of service, and vulnerable patient groups have access to discounted co-payment rates. There is a ceiling on OOP payments, with differential ceilings applied to different income groups, but the ceiling applies only to insured services. High OOP payments have been a serious concern and are increasingly driven by payments for uninsured services, most of which involve new technology and medicines with uncertain cost effectiveness.

“For employees, health insurance contributions are proportional to wage income and shared equally between the employee and employer. Health insurance contributions for the self-employed are based on both income and the value of property such as houses and vehicles. As a single payer system, health insurance has a uniform contribution formula and benefits coverage nationwide.

“Social health insurance is managed by quasi-public agencies: the National Health Insurance Service deals with premium collection, risk pooling, fund management, and reimbursement to providers, and Health Insurance Review and Assessment is responsible for claim review, assessment of appropriateness of health-care, technical support to benefit packages and the design of the provider payment system. Fees for services in the benefits package are negotiated annually between the NHIS and provider associations.

“Health-care providers are paid under the fee-for-service system, and due to the dominance of private providers, this has contributed to the rapid increase in health expenditure. Other payment methods include Diagnosis Related Group (DRG)-based prospective payments to acute care providers for seven disease categories and per-diem payments differentiated by 17 disease categories to long-term care hospitals.”

Source: World Health Organization. Regional Office for the Western Pacific. (‎2015)‎. Republic of Korea health system review. Manila: WHO Regional Office for the Western Pacific.


Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems in the US and sixteen other nations.


Page last updated Dec. 28, 2022 by Doug McVay, Editor.

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