"Excessive Non-Covered Medical Services Also Worsen the Financial Soundness of National Health Insurance"

[Asia Economy Reporter Changhwan Lee] A study has found that excessive non-reimbursable medical treatments worsen the financial soundness not only of private insurance but also of the public insurance system, the National Health Insurance (NHI).

According to the report titled "Roles and Challenges of National Health Insurance and Private Health Insurance" by the Korea Insurance Research Institute and the Seoul National University Financial Economics Research Institute on the 2nd, the recent excessive coverage by private insurance has caused negative effects that deteriorate the financial soundness of the National Health Insurance.

Recently, abnormal frequencies of manual therapy, radiofrequency ablation for thyroid nodules, cataract surgery, and excessive administration of nutritional supplements and vitamins have been identified as major causes of the deterioration in the financial soundness of health insurance.

The report cited cataract intraocular lens surgery, which has recently become a significant issue, as a case example.

Private insurance payments for cataract surgery increased sharply from 77.9 billion KRW in 2016 to 648 billion KRW in 2020. In particular, after the transition of eye ultrasound and ocular biometry tests to reimbursable status in September 2020, the price of multifocal lenses (adjustable intraocular lenses) claimed through indemnity insurance also showed a significant rise.

The incidence rate of cataract intraocular lens surgery in South Korea increased by 36.4% over four years, from 920 cases per 100,000 people in 2016 to 1,255 cases in 2020.

Notably, while the patient group aged 70 and above showed a decreasing trend, all age groups of 40-49, 50-59, and 60-69 showed increases.

This phenomenon cannot be explained solely by the increase due to population aging. The report pointed out that the sharp increase observed in the 40s and 50s age groups, which have higher enrollment rates in indemnity-type private insurance compared to those aged 70 and above, suggests inducement effects from private insurance.

The total medical cost for cataract intraocular lens surgery covered by the National Health Insurance increased by 63.5%, from 417.5 billion KRW in 2016 to 682.5 billion KRW in 2020.

When calculating the average medical cost per cataract intraocular lens surgery case by reflecting the total private insurance payments related to cataract surgery, the NHI-covered costs, and the number of surgeries, the amount rose from 1,042,000 KRW in 2016 to 2,046,000 KRW in 2020, approximately doubling over four years.

The report emphasized that the proportion of private insurance payments in this amount was less than 20% in 2016 but rose to nearly half within four years.

The report stated, "In cataract intraocular lens surgery, where both National Health Insurance and private insurance cover medical costs and share expenses, private insurance appears to be increasing the national medical cost per surgery."

It further explained, "Although cataract intraocular lens surgery is subject to a bundled payment system and does not affect the NHI reimbursement cost per surgery, private insurance indirectly influences the overall increase in National Health Insurance finances by inducing increased service utilization."