[Bottomless Jar 'Hanbang Hospital' Part 2] To Prevent Over-treatment, Start by Regulating 'Car Insurance Fees'

Unlike Advanced Countries, Health Insurance Fees and Dual System Cause Confusion
Lack of Standardized Treatment and Clinical Guidelines... System Support Needed
Growing Need for Collaboration Among Insurance Industry, Ministry of Land, and Health Insurance Review & Assessment Service

[Editor's Note] The 31st confirmed case (female, 61 years old), who is presumed to have a significant epidemiological link to the spread of the Shincheonji Church of Jesus in the context of the novel coronavirus infection (COVID-19), visited a church located in Nam-gu, Daegu four times before and after the onset of symptoms. Although she was hospitalized and receiving treatment at a Korean medicine hospital due to a traffic accident on the 7th, it was confirmed that she frequently left the hospital to visit the church and hotels. This incident has brought to light the poor management of Korean medicine hospitals regarding 'malingerers,' a long-standing headache for the insurance industry. Korean medicine hospitals have been known as major culprits in worsening insurers' loss ratios due to excessive treatment, as hospitalization is easy and management is lax. Experts point out that if the management system of Korean medicine hospitals had functioned properly, the spread of COVID-19 could have been largely controlled. This article analyzes the problems of excessive treatment in Korean medicine hospitals and seeks solutions through this case.

[Asia Economy Reporter Oh Hyung-gil] Self-employed person Choi Moon-seok (51, pseudonym) received outpatient treatment 94 times at a Korean medicine hospital from November 2017 to February last year due to a traffic accident. Although the car repair cost was a minor 540,000 KRW, the total medical expenses covered by his automobile insurance reached 6.5 million KRW. The Korean medicine hospital reduced the number of outpatient treatments per month for Choi while extending the treatment period over a long time. They also explained to other patients that treatment for at least 4 to 5 months was necessary, thereby inducing excessive treatment. When insurers investigated the hospital, it was revealed that the hospital operated on a large scale, accommodating about 25% of traffic accident patients in the area.

Korean medicine hospitals, which significantly impact the sharp increase in automobile insurance loss ratios, have become hotbeds of insurance fraud. Illegal medical practices such as attracting fake patients and excessive treatment by some hospitals are shaking the foundation of the insurance system.

Under the Medical Service Act, only doctors can prescribe physical therapy or manual therapy, but there are many nominal co-treatment cases where doctors who received prescriptions from Korean medicine doctors input them without diagnosis. This is a clear illegal medical practice directly linked to insurance fraud. Experts agree that clarifying the automobile insurance treatment fee standards is essential to prevent excessive treatment.

According to the Financial Supervisory Service's Insurance Fraud Prevention Center on the 27th, the amount detected for insurance fraud due to false (excessive) hospitalization reached 100.2 billion KRW, accounting for 12.6% of the total amount, indicating the severity of the issue. Experts point out that institutional support, such as concretely establishing the 'automobile insurance treatment fee (automobile insurance fee)' standards, is essential to reduce excessive treatment in Korean medicine hospitals.

Currently, Korea's automobile insurance fees are dualized and separate from the national health insurance fees, unlike major advanced countries. The Ministry of Land, Infrastructure and Transport decides the automobile insurance fee standards and delegates the review of treatment fees to the Health Insurance Review and Assessment Service. There is criticism that the Ministry of Land, Infrastructure and Transport, which lacks medical expertise, holds the authority to decide fee standards, making it inadequate.

Unlike Western medicine, the lack of medical standardization or clinical guidelines is also cited as a problem in Korean medicine. Therefore, even if Korean medicine hospitals mainly provide non-reimbursable treatments, there are no preventive measures in place beforehand, effectively allowing excessive treatment.

On the other hand, major countries determine automobile insurance fees based on health insurance. This approach focuses more on treating the victim's injuries rather than the cause of the accident, stemming from the principle that treatment should primarily be covered by health insurance.

In the United States, automobile insurance treatment fees and health insurance treatment fees are operated identically. There are no medical fees specifically applied to traffic accidents. This allows for non-discriminatory treatment between public and private insurance. Additionally, the United Kingdom, Canada, and Australia cover all medical expenses under their National Health Service systems, with automobile insurers paying a certain share of these costs.

In other words, major countries pay for traffic accident patients' treatment costs through the government and exercise subrogation rights against insurance companies when necessary, whereas in Korea, insurers pay medical institutions directly. This results in a lack of institutional mechanisms to prevent excessive treatment midway.

Therefore, collaboration among not only the insurance industry but also the Ministry of Land, Infrastructure and Transport and the Health Insurance Review and Assessment Service is becoming increasingly important. The non-life insurance industry has requested the government to establish detailed review guidelines for Korean medicine treatment items, which currently lack sufficient review standards, and to improve the timing of treatment fee reviews.

The Ministry of Land, Infrastructure and Transport recently revised the 'Regulations on the Handling of Automobile Insurance Treatment Fee Review Work' to improve the treatment fee review process. The main content is to establish an automobile insurance fee review committee at the Health Insurance Review and Assessment Service to prepare fee guidelines. This aims to secure medical expertise and fairness in automobile insurance treatment fee reviews and ensure consistent reviews. The Health Insurance Review and Assessment Service is also developing review indicators to improve the efficiency of automobile insurance treatment fee reviews.

Song Yoon-ah, a research fellow at the Korea Insurance Research Institute, said, "For minor accidents, it is difficult to objectively prove injuries and treatment completion, so treatment fee standards that consider this are necessary," adding, "While specifying fee standards for Korean medicine treatment, guidelines for concurrent treatment with Western medicine are also needed."

This content was produced with the assistance of AI translation services.