The views expressed in this presentation are the views of the author and do not necessarily reflect the

views or policies of the

Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they re
present. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequ
ences of their use. Terminology used may not necessarily be consistent with ADB official terms.

Health System Responses to Aging

in Korea
Kim, Jung-Hoe
Institute for Health Insurance Policy Research
National Health Insurance Service
 Outline

1. Overview : UHC and Healthcare System in Korea

2. Aging and Health

3. Policies for Population Aging in Korea

4. Lessons
1. Overview : UHC and Healthcare
System in Korea
 Republic of Korea (2016)
Total Population 50.4 million
36,532
GDP per capita
(USD current PPPs)
Pop. Over 65 13.8%

Life Expectancy at birth 82.1

7.7%
National Health Expenditure
(OECD 9.0%)
Out-of-pocket health
36.1%
expenditure

Source: OECD Data (data.oecd.org).

 Snapshot of Health
Korea Asia OECD

Health status Life expectancy at birth 82.3 73.7 80.6

Infant mortality (per 1000 live births) 3 21 4

Mortality (per 100,000 person) 746 383 470

Shared of population aged over 65 (%) 13.1 8.1 16.8

Ratio of people aged 15-64 to people aged over 65 years 5.6 10.6 5.6
Health Doctors per 1000 population 2.2 1.3 3.3
Resources &
Access Nurses per 1000 population 5.6 3.2 9.1

Hospital beds per 1000 population 11.7 3.3 4.7

Hospital discharges per 1000 population 156 116 154

Average length of stays for acute in hospitals 16.5 6.2 7.7

Health Total expenditure on Health per capita(USD PPP) 2531 935 3453
Expenditure
Out-of-pocket spending, % total exp. On health 36.1 42.2 19.0

Pharmaceutical expenditure, % total exp. On health 23.1 30.7 15.9

OECD/WHO (2016), Health at a Glance: Asia/Pacific 2016: Measuring Progress towards Universal Health Coverage, OECD Publishing, Paris.
 NHI History
1963. 1988. 1999.
Enacted Medical Insurance Act
Started Local Medical Insurance Enacted National
in rural areas Health Insurance Act

2000.
1977. 1989.
Started Medical Insurance Program Integrated to
Started Local Medical
for the employees in large companies(500+) Insurance in urban areas Single Payer System
(Established NHIS and HIRA)

12 years
Evolution of NHI and Its Characteristics
• Incremental approach
• Family-based membership
– dependents of industrial workers are covered by employee health
insurance
• Political and Economic Environments
– Mandatory enrollment enforced by authoritarian political regime
– Political will, and need for political legitimization
– Economic growth: export-driven economic development rapidly
increased the employment in the formal sector and reduces the
size of the informal sector to be subsidized
Governance Ministry of Health and Welfare
(Policy, Supervision)

Insured

Purchasing
Service Provider (Healthcare & LTC Services) Insurer
(including
LTC facilities)
Payment
(NHIS)
LTC Claims
(National Health Insurance Service)

Claims HIRA Results of Review

(Health Insurance Review & Assessment Service)
 Coverage & Financing (2017)
Population Coverage
• The Insured of NHI : 97.2% (50.94 million)
• The Medical Aid : 2.8% (1.49 million)
Benefit Coverage
• In-patient care : 80%
• Out-patient care : 40~70% (Depending on the type of healthcare
institutions)
• Pharmaceuticals : 70%
• Rare & Serious Disease: 90~95%
 Financing
Annual expenditure, 2016
• 64.6 trillion won(60.3 billion USD)

Health expenditure by type of financing, 2015

• Government schemes : 11%
• Compulsory health insurance : 46%
• Out-of-pocket : 37%
• Voluntary health insurance : 6%
Number of Healthcare Providers (2016)
Type Healthcare Providers No.
Total 89,919
Total 68,476
Tertiary 43
Hospitals General 298
Long-term care hospitals 1,428
Hospitals 1,514
Medical 30,292

Clinics Dental clinics

Public health centers 34,901
Oriental medicine clinics, etc.
Pharmacy Total 21,443
• Private Hospitals : 95% / Public Hospitals : 5%
 Payment System for NHI

Service Type Payment System Features Percentages

Outpatient Fee For Service Major payment 100%
system for NHI
Inpatient Fee For Service Major payment 87.5%
system for NHI
Diagnosis Related Group 7 minor surgical 5.0%
categories*
Per-Diem Long-term care 7.5%
hospitals
* 7 disease groups : cesarean section delivery, appendectomy, lens procedures, tonsillectomy and adenoidectomy, inguinal and femoral hernia
procedures, anal and perianal procedures, uterine and adnexal procedures for non-malignancy
 Challenges
• High out of pocket payment
• Relatively weak primary care
• Rapid increase of expenditure
– Aging population
– Dominant acute sector in delivery system
– Fee-for-service payment structure
– Rush of high price technologies
※ Private dominant providers
 New Government Reform
• The President announces new healthcare plan, which
is called “Moon Care”
• Objective
– Make sure that no patient lacks access to proper medical
treatment due to financial constraints
• Expanding National Health Insurance Coverage
– Plan by President Moon to drastically expand the national
health insurance coverage
• Major reforms
– All types of treatment, excluding plastic surgery and
cosmetic procedures
• appointments with a specialist, and fees for hospital rooms and
nursing care
– Safety nets for families facing astronomical healthcare
costs
• drastically lower the ceiling on patients' out-of-pocket payment for
medical costs
– No patient will be left untreated in times of emergency
 Concerns
• Financial sustainability
• Conflict of interest among stakeholders
– Hospital Association, Medical Association, etc.
2. Aging and Health
 Major Features
• Rapid aging
– Increasing Life Expectancy
– Declining birth rates
• Multi-morbidity
• Declines in informal care
• Disparity in health care utilization by SES
• Lengthy hospitalization (Social admission)
 Rapid Aging
Life Expectancy at birth(years) Total Fertility (live births per woman)
3.5
100
3
90
2.5
80
2
70
1.5
60
1
50

Korea Asia Korea Asia

Source : World Population Prospects 2017 revision, UN

 % of people aged 65 and over Total Population
6000000 60000

41 5000000 50000
38.1
Super-aged 4000000 40000
32.8
society
3000000 30000
Aged society 24.5

Aging society 2000000 20000

15.6
1000000 10000
10.8
7.2
0 0
1950 2017 2030 2050 2100

2000 2010 2020 2030 2040 2050 2060 Asia Korea

Source : World Population Prospects 2017 revision, UN

* Old age dependency ratio : 17.3%(‘14) → 71.0%(‘50)
 Number of Years for Percentage Aged 65 and Older in Total Population to Triple: Selected Countries
Years to increase from 7 percent to 14 percent Years to increase from 14 percent to 21 percent
(Number of years)
South Korea (2000–2027) 18 9 27
China (2001–2035) 23 11 34
Thailand (2003–2038) 21 14 35
Japan (1970–2007) 25 12 37
Tunisia (2007–2044) 24 13 37
Brazil (2012–2050) 21 17 38
Chile (1999–2041) 26 16 42
Poland (1966–2024) 45 13 58
Hungary (1941–2021) 53 27 80
Spain (1947–2028) 45 36 81
United States (1944–2033) 69 20 89
Australia (1938–2037) 73 26 99
United Kingdom (1930–2030) 45 55 100
Sweden (1890–2015) 85 40 125
France (1865–2022) 115 42 157

Source : An Aging World : 2015, International Population Reports. US Census Bureau 2016
 Declines in Informal Care
• Increasing female labor force participation
– 37.0%(1963) ⇒ 52.7%(2017)
• Attitude change on informal care in general
 Health expenditure

Total Health expenditures(billion won) Health expenditure per capita(thousand won)

Total beneficiaries 65 years and older Total beneficiaries 65 years and older

64,577
57,955
54,317 3,811
50,954
46,238 47,831 3,433
43,628 3,054 3,223
2,769 2,862 2,933

25,019
19,742 21,802
16,340 18,057 1,149 1,274
14,052 15,286 935 971 1,015 1,084
893

2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016

Source : Korea National health insurance statistical yearbook 2016(2017)

 Health expenditure per capita by age group (KRW)
5,000,000

4,500,000
4,288,863
4,000,000

3,500,000

3,000,000

2,500,000
2,344,610
2,000,000

1,500,000
1,423,126
1,000,000 956,983
847,015
674,675
500,000 470,108
411,499
0
0 TO 9 10 TO 19 20 TO 29 30 TO 39 40 TO 49 50 TO 59 60 TO 69 70 YEARS
YEARS YEARS YEARS YEARS YEARS YEARS YEARS AND
OLDER

Source : Korea National health insurance statistical yearbook 2016(2017)

 Multi-morbidity
Distribution of prevalence of chronic diseases in patients 65 years of age or older
20.7
(Unit: %) 19.0

15.6
14.1

10.9 10.9

4.7
4.0

0 1 2 3 4 5 6 7+

Number of chronic diseases

 Mortality
Age-standardised rates per100,000 person
Korea Asia OECD

All Causes 383 746 470

Cardiovascular disease 90 161 161

Cancer 115 129 129

Injuries 53 35 35

OECD/WHO (2016), Health at a Glance: Asia/Pacific 2016: Measuring Progress towards Universal Health Coverage, OECD Publishing, Paris.
3. Policies for Population Aging in Korea
 Long Term Care Insurance
• Introduction of the universal Long term care
insurance in 2008
• Background
– Rapid aging and low income security for older people
– Growing demands for long term care
• Due to demographic changes, family structures
• Increasing of female labor participation
• Smaller family size
• Change of attitudes toward care for older people
 Debates
• Universal LTCI vs. Public Assistance
– As of 2008, the share of elderly population was still lower
than OECD countries
• Key role
– Strong will of the progressive government
 Overview LTCI
• Objective
– To provide support for daily activities to the elderly in need due
to old age or geriatric diseases
– To improve health and stable living in old age
– To decrease the burden on families and increase quality of life
• Eligibility
– The elderly over 65 or the those under 65 with geriatric diseases
• i.e., dementia, cerebrovascular disease.
• Financing
– Contributions
• Additional 7.38% of the NHI contribution (as of 2018)
– Government subsidies
– Local government subsidies
– Copayment
• Type of insurance benefits
– Home-based
• Home-visiting nursing, day and night care, short-tem respite care,
equipment service
– Institution-based benefits
• LTC facility, LTCI community life household
– Care allowance for special cases
• Family care benefits in cash, Exceptional care benefit in cash
 Coverage
• Population coverage
– 2.9 % (2008) → 7.1% (2016) (of older people)

Average monthly
Copayment rates
OOP cost

Institutional care 20% 430 USD

Home-based care 15% 100 USD

 Strategies targeting the elderly
• Extending the benefit package to cover NCDs and
care services for older people
– Cancer screening
– Extension of coverage for NCD medicines
– Pilots for community primary care
• Dementia Care Policy
– Reducing out-of-pocket expenditure
– Increasing centers for dementia treatment
– Building hospitals that exclusively deal with dementia
 Establishment of a System to Support
“Dignified Death"
• Hospice Benefit
– hospice units(per-diem), 2015
– consultation team in general units*
– home-based services*
* demonstration
• Medical care for life prolongation
– The Act on Decisions on Life-Sustaining Treatment for Patients
in Hospice and Palliative Care or at the End of Life (August,
2017)
– Designation of an institution for managing medical care for life
prolongation (June,2017)
4. Lessons
Challenges of health and social care for the
elderly in Korea
• Although universal access to health and LTC services
has been achieved……..
• Inequality issues
– Health care utilization and expenditure under the NHI due
to high OOP(out-of-pocket) cost
• Inefficient system
– Lack of coordination of health and long-term care
– Social admission
 Similar problems in Asian countries
• Rapidly increasing health care costs
• Services not responsive to people’s needs or
expectations
• Not responding to an increase in NCDs and aging
• Overreliance on hospital care
– very weak gatekeeping and referral systems
• No long-term care system in most countries
 Consideration in Health & Social Policy
• Reflecting the values of equity, fairness and social
solidarity
• No single model of UHC
• Primary care is an essential component of UHC
• The policy choice between universal or targeted LTC
systems
Source : Universal Health Coverage: Moving Towards Better Health Action Framework for the Western Pacific Region
WHO 2016
 Conclusions
• Early intervention
• More public funding
• Health systems responding to an increase in NCDs
and aging
• Coordination of health and long-term care

Source : Sustainable Universal Health Coverage in the context of population ageing Leading Health Reforms in the 21st Century 17-18
July 2017
WHO Ageing and Health Factsheet #404 Sept 2015; UNDESA World Population Ageing Report 2015