Abolishing the Differential Medical Payment System

Nam Eun-Kyeong

Director, Social Policy Team


The Ministry of Health and Welfare announced a partially revised bill to abolish the differential medical payment system on November 5th of last year. The system was designed to encourage proper medical treatment in hospitals under the state medical insurance. A medical reimbursement for the cost of medical treatment is paid by the National Health Insurance Service when the time span of treatment per person is less than six minutes. However, a shortened treatment period of only one or two-minutes is prevalent. Why does the government push for a policy of wasting individual medical premiums and ruin the treatment in hospitals?

The system was rejected last June by an opposition group of medical insurance holders, some of whom were insurers and some of whom were experts in the Assessment Committee. It was rejected because of the failure to propose an alternative to a wholesale abolition of the system. However, after three months, the government passed the bill without a preliminary overhaul by Professional Assessment Committee.

The stability and confidence to remove the system is damaged in the absence of proper procedure. This decision should be reviewed due to the fact that it inhibits the right of people to pay the medical premium.


Why should the differential medical payment system be maintained?


Purported to be a significant national service, the state medical insurance is a national system funded by the government in an effort to cope with people’s health and societal hazards caused by the burden of medical premiums. The amount the state insurance pays to medical institutions depends on the price of medical care conducted by the institution (i.e. treatment, pills and sources of treatment). The price of medical treatment is set according to reasonable facts such as the workload of doctors.

The medical institutions make the claims for the medical fees—as many as 8,000 medical activities approved in 2015—to the state medical agency. The institutional medical providers tend to pursue more financial gains than better quality of medical services by means of increasing the number of patients and treatments and conducting specific treatments that contribute to higher returns. Therefore, the reimbursement to the institutions should be made in accordance with the proper treatment and a sense of how fairly they charge.

The medical payments system is aimed at preventing inappropriate medical activities from taking place for the sole purpose of financial gain. Without desirable alternatives, serious negative effects could result.

Last June, the system was discussed in the Commission and an alternative measure was proposed that would shut down certain medical institutions at certain hours. Yet in October, no additional alternatives were discussed by the Commission.

Providing a government subsidy according to hours of operation of large-scale institutions (and not medical clinics) is wrong because it targets the medical clinics to be shut down. It’s not ok to abolish the subsidy or to target the small clinics without an alternative. Therefore, it’s not an appropriate solution to abolition the system.

A minimum treatment time has to be ensured to secure the quality of medical service:

Nowadays, the prevailing tendency among some hospitals is not to focus on the patient. A concern over limited time for treatment and prescription is raised due to a possible degradation of medical service. A policy that secures the minimum treatment time needs to be strengthened to ensure appropriate time for treatment. The government has claimed that it is fine for medical clinics if the differential medical charging system is abolished.

Medical evidence that a mere two-minute treatment is sufficient in a small-scale neighborhood hospital should not even be an option. A ban on short term treatment that might cause low-quality medical service should be imposed on all medical institutions in this regard.

The fact that a large-scale hospital attracts a plurality of patients is responsible for a growing medical premium which results in inefficiency, besides the potential for failure to deliver quality medical services. A comprehensive and systematic measure that the differential medical charging system is applied to both a small- and a large-size hospital should be brought up with in an attempt to improve the healthcare delivery service and the efficient use of medical funds.



Translator : Joon Hyoung Kim

List of Articles
번호 제목 날짜 조회 수
85 [February 2016] Special Issue : The 1st ‘Best Social En... 2016-02-26 1532
84 [February 2016] In Focus_Politics :Increasing Interdepen... 2016-02-26 1743
83 [February 2016] International Agenda : Ministry of Emplo... 2016-02-26 1920
82 [February 2016] In Focus_Social Affairs : Meaningful Dec... 2016-02-26 1576
» [January 2016] Special Issue : Abolishing the Differenti... 2016-02-01 1550
80 [January 2016] International Agenda : The UN's 1st Goal ... 2016-02-01 1050
79 [January 2016] In Focus_Social Affairs : Survey by legal... 2016-01-29 920
78 [January 2016] In Focus_Economy : Who do the tax reforms... 2016-01-29 1096
77 [January 2016] CCEJ Opinion : Where’s the reform? Conce... 2016-01-29 1247
76 [December 2015] In Focus_Economy : Repeal the Regressive... 2015-12-30 1248
75 [December 2015] In Focus_Social Affairs : MDDA for Whom? 2015-12-30 1106
74 [December 2015] In Focus_Politics : An Interview with Ya... 2015-12-30 1115
73 [December 2015] International Agenda : G20 and UN : Chan... 2015-12-30 1325
72 [December 2015] Special Issue : The Last Congressional I... 2015-12-30 1358
71 [November 2015] CCEJ Opinion : The Saemaeul Movement - a... 2015-11-30 1293
70 [November 2015] CCEJ Special Issue : Price Ceilings Need... 2015-11-30 1501
69 [November 2015] In Focus_Economy : Unfair Bidding System... 2015-11-30 1170
68 [November 2015] In Focus_Social Affairs : Opposition to ... 2015-11-30 1148
67 [November 2015] In Focus_Politics : New Appellate Court ... 2015-11-30 1095
66 [November 2015] CCEJ International Agenda : The hidden s... 2015-11-30 1236