Korea’s healthcare system has already begun to collapse. To prevent further collapse, it is necessary to ban mixed care, abolish physician incentives, and introduce the family doctor system, an expert said.

Lee Kyu-shik, director of the Korea Institute for Healthcare & Welfare Policy, made these and other points in his paper “Beginning of the healthcare collapse,” released as the institute’s issue paper on Wednesday.

As reasons for the collapse of the Korean healthcare system, Lee cited the lack of a medical consumer market and commercializing the medical industry by introducing more non-reimbursable services.

"In introducing health insurance system, policymakers didn't realize that the healthcare consumer market would change, so they left the allocation of healthcare service to the old consumer market where they allocated it based on patients demand, not access needs.”

As a result, healthcare utilization is two to six times higher in Korea than in Western European countries, threatening the finance of healthcare insurance,” Lee added.

"The allocation of healthcare service covered by the state insurance is based on patient demand. Moreover, private insurance is also provided as a loss insurance that pays policyholders all costs resulting from diseases or injuries, making it difficult for the health insurance system to function properly," Lee said.

Lee pointed out that medical personnel is also distributed to the market demand, deepening the income gap among specialists, creating a medical void in departments with low income due to the shortage of doctors, and setting off the collapse of the medical system.

As the signs of the collapsing healthcare system in Korea, Lee cited the death of emergency patients in ambulances, difficulty recruiting doctors at public and regional hospitals recruiting doctors despite offering high wages, closures of pediatric and adolescent departments, the disparity in physician income by specialty, the concentration of medical personnel in the Seoul metro region, shortage of doctors, and rapid increase in medical expenses.

"The real problem is that no healthcare policy can produce effects under these situations," he said. "Trying to solve (these problems) with changes in reimbursement system is not a good solution, only exacerbating the problems in our healthcare system."

Lee emphasized that the long-term direction of healthcare policy should focus on preventing the collapse of the healthcare system.

First of all, the government should urgently consider special measures, such as the "Rules on restricting permits for regional medical institutions,” implemented in 1985 to address the overcrowding of beds in the greater Seoul area, he said.

He also stressed that when large hospitals in the Seoul metro region establish branches, they should be encouraged to open them in provincial cities as much as possible for regionalized medical service.

In particular, plans to establish public medical schools in provinces will get nowhere, he pointed out.

That’s because public medical schools cannot provide differentiated education from existing medical schools, and the establishment of small public medical schools may lead to the deterioration of medical education for young people due to difficulties securing professors for basic education, Lee noted.

Commenting on the commercialization of healthcare, he said that it has already reached a serious level, emphasizing that the government must take steps to eradicate the provision of non-reimbursable services to prevent its further commercialization.

To this end, he said, the government must prohibit hospitals providing insured services from providing uninsured services by banning mixed care as Japan does. It also should recognize for-profit hospitals by introducing a contract system for nursing institutions and permitting only for-profit hospitals to provide non-reimbursable services.

Besides, in recognizing for-profit hospitals, the government should shift the loss insurance from the current supplementary-type to additional-type insurance to prevent the loss insurance from contributing to accelerating the commercialization of healthcare service, Lee emphasized.

"In this way, medical institutions contracted as health insurance service providers can operate regardless of profits,” he added.

Lee said that pay-for-performance programs for doctors at large hospitals are another example of for-profit healthcare that should be stopped.

"Paying bonuses encourages excessive services and the provision of uninsured services," Lee said. "The pay-for-performance system, which is unique to Korea, should be eliminated urgently. It is also why doctors avoid departments like pediatrics where there are fewer non-reimbursable services."

In addition, he suggested introducing a family doctor system that would reduce patients’ burden and shorten the waiting period for hospitalization if they bring a referral letter from their family doctor and implementing community care service, which also includes the family doctor system.

In particular, if nurses visit elderly patients’ homes and discover a medical problem, they should be able to immediately contact the primary care physician to obtain a prescription and perform treatment, such as an injection or a simple surgery.