Mooncare: South Korea's Proposed Health Insurance Reform in Full

I woke up with a mild hearing problem this morning. It wasn’t debilitating in any way, but I was worried it might get worse and interfere with work.

Had I still been in the U.S., I would have powered through because my condition wouldn’t have justified the trouble of seeing a specialist — going through a general physician first, then waiting weeks for an appointment. Then there is the issue of money — if I’m not covered by a decent private insurance, I would have to pay an incredible sum.

Fortunately, I live in Seoul, where I am insured by the national healthcare system. I popped into a nearby ear, nose and throat clinic for a diagnosis and prescription and walked out with a total bill of 7,000 won (roughly $6.50), including the price of medicine. That’s about a third of my total medical bill, and the National Health Insurance Service (NHIS) will reimburse the clinic for the rest after evaluating if my treatment was medically valid.

With such efficiency and low costs, South Korea’s universal healthcare may seem enviable. But the OECD found that South Koreans are burdened with relatively high out-of-pocket spending. One out of every twenty-five households faces the risk of becoming the “medical poor” — going bankrupt due to high medical bills from treating serious illnesses. Going to a neighborhood doctor, even a specialist, is light on the wallet; but develop cancer or suffer major injuries, and chances are that it will be an expensive ordeal.

On average, the South Korean healthcare system currently covers 62.6 percent of all necessary medical costs for individual patients, who pay for the remaining 37.4 percent themselves. That may not sound like much, but out-of-pocket payment figures for Germany, Belgium, and Switzerland — all nations with universal healthcare — were 12.2, 20.4, and 26 percent. Among countries with universal healthcare, South Korea has the highest rate of out-of-pocket payment after Mexico.

President Moon Jae-in’s new healthcare policy, commonly dubbed “Mooncare,” was announced last August as an effort to address the potentially heavy financial burden on patients and other inadequacies of the NHIS. It promises utopian changes: deeper and wider coverage, lower costs for patients, no financial losses for medical professionals, less need for private medical insurance, and no notable tax and fee increase.

One way the new policy plans to tackle such a wide array of challenges is by reducing the total number of patient visits. South Koreans frequently visit hospitals and clinics, more so than citizens of other countries with universal healthcare. The average number of doctor consultations per citizen each year in South Korea was 14.6 as of 2015, the highest in the OECD. For Germany, Belgium, and Switzerland, the figures were 9.9, 7.4, and 3.9, respectively.

Park Young-eun, who works in the Healthcare Department of the Ministry of Health and Welfare (MOHW), said that under the current system, such frequent visits could “eventually take a toll on the NHIS and major hospitals.”

Mooncare promises to deal with precisely that issue. In its “MOHW answers questions from medical professionals” page, the government has pledged, “Through a realistic balancing of healthcare payments, we will both increase coverage for patients and increase reimbursement for treatments that have been priced too low.” In short, a higher patient’s share of the medical cost for simple medical treatments, which will in turn lead to fewer visits, and a higher state’s share of the medical cost for complex, and therefore more expensive, procedures.

Less convincing is Mooncare’s pledge to expand the “Integrated Nurse-Caretaker Service.” The service allows patients to hire nurses to do the guardians’ or caretakers’ work at a lower price. (In South Korea the custom is for family members or hired professionals to provide around-the-clock care to patients during long-term hospital stay, and professional caregivers are expensive to employ.)

The Integrated Nurse-Caretaker Service is currently in operation across 23,000 beds at 353 hospitals. Moon has promised to expand this program to over 100,000 hospital beds by 2022.

The program, in increasing the workload of nurses, stands in opposition with another key medical policy proposal. The MOHW announced swiftly in March, in light of a nurse’s suicide the previous month, unprecedented “Guidelines for Improving Treatment and Working Environment of Nurses.” The proposal addressed labor abuse and promised 100,000 new nurses by 2022.

Unfortunately, it provided no details for hiring more nurses. And more critically, the plan highlighted the importance of the Integrated Nurse-Caretaker Service for “better-quality medical care for patients” without factoring in the burden it will place on already overworked nurses.

Lee Seong-yeon, an intensive care unit (ICU) nurse at Seoul Metropolitan Government-Seoul National University Boramae Medical Center, told Korea Exposé, “People just don’t understand how much pressure working in a hospital really entails.”

She elaborated: “I work in the ICU, so the nurse-patient ratio is fixed at 1:3. For other units, it can go up to 1:16. The slightest mistake can lead to death in the ICU. Imagine the burden when nurses have to take on even more mundane responsibilities. We really need more nurses.”

Even the MOHW found last year that by 2030, South Korea will be 158,000 nurses short of the number required for sufficient patient care due to “increase in demand for medical labor … from expanding policies like the Integrated Nurse-Caretaker Service.”

But it’s oddly not nurses but doctors who have taken an aggressive stance against Mooncare. In March, the Korea Medical Association, the main interest group for doctors nationwide, elected Choi Dae-jip, a general medical practitioner and staunch supporter of former president Park Geun-hye, as their leader.

Choi, who once shaved his head to protest the proposed medical reform, won the position on his anti-Mooncare platform. But his objection has little to do with nurses’ rights or labor shortage.

The KMA argues that Mooncare, by expanding coverage, will “bankrupt the NHIS in its rush to increase coverage.” It asserts that each treatment requires a long-term evaluation of “reasonable reimbursement standards, appropriate reimbursement levels, and expert opinions on its medical necessity and demand.” Mooncare currently does not offer details on how each of the 3,800 medical treatments that are currently not covered by the national health insurance will be evaluated and at what expense.

Doctors have another reason to fear expanded coverage: If a certain treatment is covered by the national health insurance, the price is regulated by the government and they don’t have the freedom to charge fees of their choice. The reform will certainly cut into their profit. The KMA claims: “The rapid changes will dismantle medical infrastructure by driving 50 percent of hospitals and 20 to 30 percent of clinics out of business within three years.”

There are also voices of caution outside the medical establishment. Kang Hee-jeong at the Korea Institute for Health and Social Affairs (KIHASA), a state-funded research center, sees Mooncare as a step in the right direction of “guaranteeing basic medical rights.” But she wrote for the Health and Social Welfare Forum last January: “Evaluation of each treatment [for coverage] requires not only assessing its effectiveness and safety, but also its economic function… No details have been released regarding the current status, assessment criteria, and monitoring process of the 3,800 items.”

“It is doubtful that the current assessment body, the Health Insurance Review and Assessment Service, has sufficient labor or procedures to carry out these evaluations.”

A 2017 in-depth survey of 2,000 citizens by the NHIS found that respondents gave the current national healthcare system an average score of 71.8 out of 100, indicating a healthy degree of satisfaction. But interestingly, nearly 87 percent of the respondents also had private health insurance plans at the average monthly cost of 147,000 won ($136.50).

If some of that money could be channeled into the national health care system, it would certainly fund a significant reform, but to convince the public to contribute more, the system has to be made better. The NHIS estimated that if each person contributed an additional 12,500 won ($11.60) per month to the plan, it would allow the state to pay for 73.5 percent of necessary medical costs. But respondents to the above survey said they were willing to pay on average only 7,490 won ($6.90) more, even though they were by and large in agreement that the current system doesn’t pay for a sufficient portion of medical expenses.

Still, the government is in a good place. Moon revels in 70 to 80 percent approval ratings, and overhauling the national health insurance was his key election pledge. The KMA, however vocal it may be, has not had much success in attracting many of its members to join the regular protests against Mooncare.

If the administration can address the practical challenges of finance and labor shortage (and it has shown an inclination to do so, by suggesting it might simply increase the healthcare budget), it will claim a significant domestic policy victory. And the real beneficiaries will be all residents of South Korea regardless of their nationalities.