The NHS in the UK currently provides the worst access to healthcare in Europe, despite spending as a percentage of GDP levels akin to its neighbours; by comparison, South Korea consistently ranks as one of the best healthcare systems in the world. A comprehensive, single-payer health insurance system achieves this, harnessing the benefits of the affordability of an entirely government-run system such as the NHS, combined and the accessibility and high quality of care provided by private hospitals.
Structure
As aforementioned, all hospitals and medical centres are privately-owned in Korea, aside from a handful of community centres. Health insurance is mandatory and publicly funded through taxation. Contributions total 7.65% of monthly income, capped at £4,000 per person (2022), coupled with taxes on tobacco, government subsidies and contributions – these fund the entire system. Impoverished individuals have their costs entirely covered by the government, including premiums and deductibles. Individuals who are unemployed and not deemed extremely poor directly pay their premiums to the National Health Insurance Corporation.
A committee of representatives comprised of taxpayers, medical professionals and the government, the National Health Insurance Corporation determines the cost of each medical procedure. This excludes electives and other unnecessary expenses (e.g. upgrading to a larger hospital room). Patients pay for a small deductible – a percentage of the cost determined by the NHIC board to obtain prescriptions from doctors. Similarly, patients pay a small deductible to obtain medicines, with the rest of the procedure paid for by the NHIC.
With this said, specific treatments such as cancer can include many procedures that are deemed elective – thus, are not covered by the NHIC. As such, a market in Korea for private insurance to cover chronic conditions and diseases remains. Similarly, deductibles can reach high levels as they are a percentage of the NHIC-set cost as a pose to a fixed amount.
Outcomes
Due to the incentive structure of the Korean healthcare system, waiting times are low. This is because doctors are incentivised to see as many patients as possible, as the NHIC-set price is fixed regardless of patients. The low prices set by the NHIC ensure that patients regularly visit medical centres for most symptoms, leading to early detection of potentially serious conditions. This promotes the development of the economy’s productive potential as Koreans suffer few long-term absences from the workforce.
The importance of early detection from the efficient Korean healthcare system cannot be understated. Long-term medical conditions in the UK is a leading factor behind the sharp fall in the UK workforce following the pandemic; the crisis of NHS waiting times in the years leading up to 2020 led to individuals avoiding medical attention for minor conditions, leading to the development of more severe conditions in particular cases. The UK now experiences an acute labour shortage, as vacancies surpassed the unemployment rate for the first time since records began in 2022. This has only been exacerbated by the pandemic, as the number of individuals waiting over 12 hours at A&E from decision to admission has risen from less than 500 in January 2019 to over 30,000 in September 2022.
Healthcare spending in Korea is far lower than in most OECD nations. In 2018, an OECD report concluded health expenditure as a percentage of GDP in Korea was 8.6%; this figure was 11.2% in France and 16.9% in the US. This is because of the low administrative costs of a single-payer system while simultaneously avoiding the middle-management bureaucracy of the NHS; the private sector’s role in providing healthcare forces efficiencies that eliminate these unnecessary costs due to competition from other healthcare providers.
Ultimately, the Korean healthcare system is an exemplary model for most countries. The combination of low costs and high accessibility promotes a healthy workforce that ensures long-run economic growth. The Korean healthcare system isn’t without its flaws. The NHIC is conservative in the number of covered procedures. At the same time, all common diseases and medications are covered, and complex conditions such as cancers can become costly due to this lack of coverage. While doctors and medical professionals in Korea earn more than those in the NHS, they are still underpaid compared to their American and European counterparts. This is because the NHIC-set price limits their earnings, leading to overprescription in some cases. However, given the scale of the benefits outlined, these drawbacks are vastly outweighed; the constantly crisis-ridden NHS could learn many lessons from the Korean healthcare system.
Free Marketeer 