[Start! DTx Era]② Kang Do-tae "New Technologies like DTx Will Be an Opportunity to Improve Public Health"

Cost-Effective Contribution to Health Insurance Financial Stability Expected

Repeated Apologies for '4.6 Billion Embezzlement Case'
Emphasizing Ongoing Efforts for Financial Soundness

Kang Do-tae, President of the National Health Insurance Service, is speaking at a press conference held on the morning of the 15th in Mapo-gu, Seoul.
[Photo by National Health Insurance Service]

[Asia Economy Reporter Chunhee Lee] With the launch of the first domestically produced digital therapeutic device (DTx, digital therapeutics), Kang Do-tae, the Commissioner of the National Health Insurance Service (NHIS), expressed a progressive view that the introduction of new technologies like DTx could be an opportunity to contribute to the improvement of public health and the stabilization of health insurance finances.

At a press briefing held on the morning of the 15th in Mapo-gu, Seoul, Commissioner Kang stated, "I agree that various opportunities are presented when considering the impact of new technologies on public health improvement and health insurance finances," adding, "The NHIS's position is to cooperate closely with relevant agencies."

This progressive stance was presented in response to the heated debate over reimbursement triggered by the Ministry of Food and Drug Safety’s approval of Aimmed’s insomnia treatment DTx 'Somz' as the first domestic DTx. In South Korea, where a strong public health insurance system is established, reimbursement under the National Health Insurance is essentially the key to the success of commercialization. Although commercialization through non-reimbursement or private insurance is possible, the DTx industry believes that from a long-term perspective, it is better to pursue the straightforward approach of health insurance reimbursement rather than premature commercialization through non-reimbursement or private insurance. Given Commissioner Kang’s progressive stance, the path toward reimbursement is likely to open up further in the future.

DTx is expected to demonstrate high cost-effectiveness by leveraging its 'digital' characteristics. For example, if traditional face-to-face counseling has an efficacy of 100 and treatment through DTx has an efficacy of about 30, even though the absolute efficacy is lower, if face-to-face counseling costs 100,000 KRW per week and DTx costs 10,000 KRW per week, the cost per unit efficacy for DTx is three times better. Although traditional treatments are superior in absolute effect, DTx has an advantage in terms of economic efficiency, so expanding the distribution of DTx is expected to greatly contribute to the recently emerging challenge of stabilizing health insurance finances.

However, securing 'Real-World Data (RWD)' is a prerequisite challenge for health insurance reimbursement. From the perspective of the Health Insurance Review and Assessment Service and NHIS, which manage limited health insurance finances, they intend to consider not only data accumulated from clinical trials but also RWD from actual users to verify the effectiveness of DTx during the reimbursement process. Regarding this, Commissioner Kang expressed concern, saying, "When reimbursing new innovative medical devices, besides efficacy and safety, it is necessary to consider whether there is clinical effectiveness, whether it performs better than other products, and whether reimbursement is financially feasible, but it is difficult to accumulate clinical evidence for newly developed products." He added, "Although it is not the NHIS’s direct responsibility, it is necessary to consider the potential value of innovative medical devices and to properly align procedures such as applying higher out-of-pocket costs if they fall under advanced medical technology."

Kang Do-tae, President of the National Health Insurance Service, is speaking at a press conference held on the morning of the 15th in Mapo-gu, Seoul.
[Photo by National Health Insurance Service]

Meanwhile, Commissioner Kang repeatedly apologized for the 4.6 billion KRW embezzlement incident involving an NHIS employee that occurred last year, starting from the beginning of the briefing. He said, "As the Commissioner, I feel a great responsibility for the embezzlement incident," and explained, "Since the incident, we have formed a Management Innovation Promotion Team to thoroughly inspect all operations and are taking necessary measures according to schedule." He also added, "Furthermore, we are rechecking through consulting with external professional organizations to ensure there are no shortcomings, and all employees are doing their best to restore public trust."

Regarding the future direction of health insurance reform, he emphasized focusing on strengthening coverage centered on essential medical care and improving fairness in health insurance premium assessments. Commissioner Kang stated, "The health insurance coverage rate in 2021 was 64.5%, a slight decrease from the previous year, mainly due to an increase in non-reimbursed treatments at clinics," and emphasized, "The coverage rate for the four major severe diseases is 84%, and for vulnerable groups, it is about 70%, which has actually eased the real medical expenses burden for severe and vulnerable groups." He continued, "Following essential medical support measures, we will continue to promote NHIS-level tasks such as supporting the introduction of public policy fees in severe, emergency, childbirth, and pediatric fields," and added, "We will enhance medical accessibility mainly for vulnerable groups and facilitate the rapid support of high-cost therapeutics to alleviate medical expenses burdens." He also expressed his determination to strengthen monitoring of reimbursed items and manage excessive medical use to improve inefficient spending.

Regarding the soundness of health insurance finances, he expressed a position to focus on efforts to stabilize finances with active government support rather than raising premium rates. Currently, the health insurance premium rate for workplace subscribers is 7.09%, close to the legal ceiling of 8%. However, Commissioner Kang said, "In the past, it was predicted that premiums would exceed 8% by 2027, but with a 1.49% increase this year and if this trend continues, the ceiling will be reached after 2030," and mentioned, "At this stage, rather than worrying about the ceiling, more efforts are needed to manage expenditures and stabilize finances."

Commissioner Kang also appealed for the swift legislation of national treasury support for the health insurance system, which is currently in crisis. Until last year, the government supported the NHIS with 20% of the expected insurance premium revenue for the year under the 'National Health Insurance Act' and other laws. However, this provision expired after failing to reach an extension agreement at the end of last year. Commissioner Kang said, "It is important that the law is amended quickly to enable stable support," adding, "Strengthening national responsibility and establishing a legal basis quickly will allow for better financial planning and increase predictability in premium decisions."

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