Government to inject ￦6.5 trillion to improve nursing hospital system through ‘caregiver compensation scheme’

The government will fully support healthcare-oriented nursing hospitals eligible for nursing care reimbursement. It will not only implement nursing care reimbursement but also raise fees for patients requiring high levels of medical care.

To this end, it will invest 6.5 trillion won ($4.6 billion) over the next five years into healthcare-oriented nursing hospitals -- 5.2 trillion won for nursing care reimbursement and 1.3 trillion won for fee increases.

The Ministry of Health and Welfare held a public hearing titled “Innovation of Healthcare-Oriented Nursing Hospitals and Direction for Promoting Nursing Care Coverage” at the Royal Hotel Seoul on Monday, unveiling the government's plan for nursing care coverage in nursing hospitals.

Covering nursing care costs at nursing hospitals is included in the Lee Jae Myung administration's national agenda. Therefore, the ministry plans to pursue applying health insurance to nursing care costs, alongside complementary measures for related systems, such as the innovation of healthcare-oriented nursing hospitals, nursing hospital fees, and integrated care.

Specifically, the plan is to designate 500 healthcare-oriented nursing hospitals with high medical capabilities by 2030, with a focus on these institutions to advance nursing care reimbursement. This approach is based on the principle that extending nursing care support to socially admitted patients – hospitalized patients for just caring services -- in nursing hospitals would hinder fiscal efficiency and sustainability.

The patient copayment rate for nursing services will be about 30 percent. Accordingly, if monthly nursing care costs at a nursing hospital are set at 2 to 2.67 million won, the patient copayment would be around 600,000 to 800,000 won. Additionally, to minimize unnecessary long-term hospitalization, nursing care fees will be reduced by 10 percent, and the patient copayment will increase by 10 percent for stays exceeding 180 days. Nursing care fees will be reduced by 20 percent, and the patient copayment will increase by 20 percent for stays exceeding 360 days.

To manage the quality of nursing staff, certified care workers or life/activity support workers will be required. However, to secure a stable nursing workforce outside the Seoul metro region, the use of foreign workers will also be considered. Foreign workers must possess a proficiency in the Korean language.

Increasing nursing benefits and nursing hospital fees simultaneously

Alongside this, a plan to supplement the nursing hospital fee payment system was announced to strengthen medical services for nursing hospitals as part of implementing nursing benefits. Accordingly, fees for patients requiring the highest level of medical care and those with high complexity will be increased. Separate compensation items will be added for essential high-cost, high-complexity procedures, treatment materials, and pharmaceuticals.

Furthermore, the policy aims to reduce so-called social hospitalizations by increasing the copayment rate for patients with mild or lower severity or those admitted voluntarily. Accordingly, the copayment rate for patients with mild or lower severity will be raised from the current 20 percent to 50 percent, and for voluntary admissions, from 40 percent to 50 percent.

During the discussion following the presentation, various opinions were expressed regarding the reimbursement of nursing care in long-term care hospitals.

Professor Kim Hong-soo of the Department of Health at Seoul National University's Graduate School of Public Health stated, “I understand that the plan to designate 500 healthcare-oriented long-term care hospitals is based on considerations of the highest level of medical care and the number of high-complexity patients. How future changes in patient numbers will be reflected must also be considered.”

Associate Professor Jang Seok-yong of Yonsei University's Graduate School of Public Health said, “Caregiver staffing is crucial (for implementing nursing care benefits in long-term care hospitals), and hospitals should directly employ these caregivers. Furthermore, considering patient assessments and other factors, applying the benefit system at the institutional level appears most appropriate based on the policy direction.”

However, Ahn Byeong-tae, vice president of the Korean Convalescent Hospital Association, remarked, “I don’t know who this nursing reimbursement is for. The current government proposal appears aimed at ‘improving caregiver treatment.’ There should be no discrimination in nursing care. I don't understand why only inpatients at nursing hospitals should receive selective nursing care.”

He added, “The introduction of nursing care benefits for nursing hospitals should not be used as a means to restructure the functions of nursing hospitals. Nursing care is nursing care; restructuring is restructuring. The introduction of nursing care benefits should be applied based on the patient, not the institution.”

Kim Ki-ju, vice chairman of the planning committee at the Korean Hospital Association, said, “Regarding patient groups, terminal cancer and hospice patients are also not included in the highest or high levels of medical care. Measures to include these patients are also necessary."

Gong In-sik, head of the Ministry of Health and Welfare's Health Insurance Payment Innovation Task Force, stated, “The national policy agenda was finalized with the direction that health insurance support for nursing care costs is necessary,” adding, “The crucial point is that it must be applied first to patients with high medical needs and significant nursing care burdens.”

He continued, “It is crucial to accurately define the appropriate patient population and sufficiently forecast demand to prepare the necessary number of care service providers and beds. We will strive to accurately estimate this by listening to field opinions and other input.”

‘A policy to pressurize and drive nursing hospitals out of business’

During the floor discussion following the presentations and panel debate, many nursing hospital officials expressed concerns about the government's policy to cover nursing care costs. Some argued that the government is using the introduction of nursing care benefits as a pretext to force nursing hospitals out of business.

Lim Seon-jae, president of the Korea Convalescent Hospital Association, said, “We support the introduction of nursing care benefits for diligent hospitals and for patients with severe conditions. However, nursing hospitals should not become targets for elimination under the guise of innovation and function-based care. If integrated care is implemented, restructuring of nursing hospitals will occur naturally.”

He continued, “Using nursing care reimbursement as a pretext to push for the redefinition of nursing hospitals' functions is inappropriate. While inclusion among the 500 designated hospitals would be beneficial, neglecting the remaining 800 cannot make this a good policy. The nursing hospital sector's position is that nursing care reimbursement should be based on patient criteria, not institutional standards.”

A director of a nursing hospital in Seoul said, “This plan to reimburse nursing care appears to be a policy aimed at oppressing and killing off nursing hospitals. If such a policy is pushed through, we will respond till the end, including staging legal battles.”