[1mm Financial Talk] The Property Insurance Industry Is Currently at War with Ophthalmology Clinics

As Overdiagnosis of Cataracts Worsens and Indemnity Insurance Deficits Grow, Insurers Take Direct Action

[Asia Economy Reporter Changhwan Lee] "The price of illegal brokers involved in cataract surgery is skyrocketing. When charging excessively high cataract surgery fees exceeding 10 million won, brokers usually take about half of the amount."

The non-life insurance industry is drawing attention by waging a war against ophthalmology clinics performing cataract surgeries through illegal means. This is because the increase in excessive cataract surgeries is causing deficits in indemnity health insurance (real loss insurance).

Insurance Companies Actively Detecting and Reporting Suspicious Illegal Hospitals

According to the insurance industry on the 15th, major domestic non-life insurers such as Samsung Fire & Marine Insurance, DB Insurance, Hyundai Marine & Fire Insurance, KB Insurance, and Meritz Fire & Marine Insurance have been actively identifying ophthalmology clinics conducting illegal cataract surgeries since the second half of last year and reporting them to public health centers.

KB Insurance reported 55 ophthalmology clinics this month to health authorities for illegal medical advertising and illegal patient inducement, as they posted exaggerated or false advertisements to attract cataract surgery patients. These clinics exaggerated by claiming a 0% complication rate for cataract surgery or falsely recorded the number of cataract surgeries performed.

According to the Medical Service Act, medical institutions and personnel are prohibited from making false or exaggerated medical advertisements. Among the reported hospitals, 25 received administrative actions such as deletion or correction of illegal advertisements from the relevant public health centers, while the rest are under review.

Reports have also been made against hospitals where non-medical counselors (coordinators) conduct cataract surgery consultations and examinations for patients. On the 12th, Samsung Fire & Marine Insurance reported three ophthalmology clinics in Gangnam to health authorities for violating the Medical Service Act. These clinics are suspected of having coordinators, not medical personnel, provide cataract surgery consultations and examinations to patients.

Insurance companies are identifying hospitals that frequently claim cataract surgery insurance payments or charge excessively high fees, focusing on clinics with excessive medical treatment. The typical cost for cataract surgery is around 5 to 6 million won for both eyes, but some clinics charge well over 10 million won.

For first-generation indemnity insurance policies sold in the past, there was almost no deductible, whereas recently sold fourth-generation indemnity insurance policies have deductibles of 20-30%. Since indemnity insurance subscribers only pay the deductible portion, hospitals hire brokers to attract patients.

Indemnity Insurance Deficit in Trillions, but Health Authorities Remain Passive

Non-life insurers have actively reported excessive cataract surgeries due to the indemnity insurance deficit. Last year, the domestic indemnity insurance deficit was estimated at about 3.5 trillion won, the highest ever. Excessive cataract surgeries are considered a major cause of the expanding indemnity insurance deficit.

According to the Korea Insurance Research Institute, the proportion of cataract surgery in non-life insurers' indemnity insurance payments increased from 1.4% in 2016 to 6.8% in 2020, a 4.8-fold increase over four years. The indemnity insurance payments for cataract surgery rapidly grew from 77.9 billion won in 2016 to an estimated over 1 trillion won last year.

Although excessive cataract surgeries are increasing, the Ministry of Health and Welfare and local public health centers, responsible for hospital supervision, have not been properly cracking down, which is one reason insurers are taking direct action. Public health centers are known to often close cases without proper sanctions or delay enforcement even after receiving reports from non-life insurers.

As crackdowns on excessive cataract surgeries increase, there are also reports that the power of cataract surgery brokers has grown recently, as it has become more difficult to recruit patients for surgery.

An industry insider said, "Since the beginning of this year, the price for illegal cataract surgery brokers among ophthalmology clinics has risen sharply," adding, "Brokers receive half of the surgery fee, but even paying that, the hospital still profits."

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