HEALTH FOR ALL IN THE REPUBLIC-OF-KOREA - ONE COUNTRY EXPERIENCE WITHIMPLEMENTING UNIVERSAL HEALTH-CARE

Health care reforms in many countries face the twin challenges of prov iding universal coverage while controlling spiraling costs. Sixteen ye ars ago the Republic of Korea had no national plan for health insuranc e, and only 8.8% of the population was covered. In 1975, health care a ccounted for 2.8% of GDP with government providing 12% of the finances . In 1977, Korea adopted a policy designed to achieve universal covera ge while maintaining fee-for-service reimbursement. Korea incrementall y established an employer based health care scheme by first mandating coverage for businesses, then government employees and teachers. Cover age was later extended to the poor, the self-employed, and residents o f rural areas. Independent insurance societies manage each scheme, set premiums and co-payments, and are responsible for maintaining financi al viability. By 1991, 30% of Korea's health care expenditures were fr om public funds, and health care costs had risen to 7.1% of GDP. Healt h care reform in Korea has been successful in achieving universal cove rage, providing for a full range of services, and eliminating adverse selection. The system is financially solvent, costs are equitably dist ributed with the government providing subsidies when necessary, and sm all businesses have not been unduly burdened economically. Attempts to limit costs, however, have been unsuccessful. Patient demand for heal th care has remained surprisingly resistant to increasing co-payments. Providers have responded to lower physician and hospital fees by prov iding shorter, more frequent patient visits, relabeling services, and increasing hospital admissions. Competition between insurance societie s has not materialized in a meaningful way to control costs.