[Column] Before raising insurance premiums, fix Korea's broken healthcare system

The Health Insurance Research Institute stated that the national health insurance fund could be completely depleted by 2028, as reported in its document, “Measures for Stabilizing Financial Resources to Ensure the Sustainability of the National Health Insurance System.” Ultimately, the report argues that new financial resources, beyond health insurance premiums, are necessary. The report states that Korea's health insurance finances are overly dependent on insurance premium revenues. With the declining birthrate and aging population, it is clear that insurance premium revenues will decrease, making it necessary to secure new sources of revenue. In response, the report proposes the introduction of a provisional “social security tax.”

It is true that the health insurance finances are sounding alarm bells. According to a report by the National Assembly Budget Office last year, the health insurance fund is projected to turn into a deficit starting in 2024, and by 2028, the accumulated reserves are expected to be completely depleted as insurance premium revenues fail to keep pace with surging medical expenses. It is undeniable that the health insurance fund is facing a crisis. As examples of solutions to such fiscal issues, the report cited France and Taiwan, whose governments reportedly address fiscal challenges through diverse revenue sources. France operates a social security contribution (CSG) and a social security purpose tax (ITAF), which apply a certain tax rate to income from employment, pensions, interest, and property. Taiwan, through its second-generation health insurance reform, imposes additional premiums on high-income earners, rental income, and dividends.

However, while reading this report, I couldn't help but think, “The analysis seems correct, but is the proposed solution—tax policies to secure new revenue—really the right approach?”

As is well known, Korea's current medical system is in disarray. From my perspective, it is 100 percent inefficient. Yet, while discussing fiscal sustainability, the structural issues were not even mentioned.

Let's consider this scenario. I once served as an external board member at a public medical institution. This was over 20 years ago. At the time, the institution was considering expansion. The reason given was that patient waiting times for hospital beds were becoming excessively long due to a shortage of rooms, leading to a surge in complaints. As the only doctor on the board, I wondered whether the hospital was being operated efficiently. Indeed, upon investigation, the hospital's inpatient metrics revealed that the average length of stay was nearly twice that of the average private university hospital. In other words, even if the hospital operated at an average level, it could have reduced waiting times by half; instead, it was proposing to double the number of beds. This decision to expand without addressing operational inefficiencies made me think, “This is the problem with public institutions.” Of course, my opinion wasn't taken into account, and the hospital went ahead with its large-scale expansion; however, they may still feel the shortage of beds, I suppose.

It's true that the aging population and the resulting surge in medical expenses, coupled with a decrease in insurance premiums due to population decline, are causing a crisis in the health insurance budget. But everyone knows this, right? People also know how inefficiently we utilize medical care in this country, the explosive growth of overtreatment, excessive medical care expenses five to six times higher than those of advanced countries, hospital bed numbers three times the OECD average, and the bloated, dinosaur-like tertiary general hospitals that continue to operate contrary to their original purpose, all of which are inflicting severe damage on the health insurance finance.

While discussing the crisis in health insurance finance, should we also address the issue of raising more money—and doing so through taxes—without addressing structural issues, such as the uncontrolled surge in non-covered medical expenses? There is also no mention of the dual insurance premium system, which remains unresolved since the integration of health insurance in 2000 and is one of the most serious issues, albeit not yet fully exposed. Should we just start collecting more money while setting aside all these issues? I strongly disagree with this. I wonder why such a report was issued. The researchers must be aware of these problems.