The South Korean government is set to overhaul the health insurance fee structure, which has been criticized for contributing to the expansion of large hospitals and unnecessary medical procedures. The plan involves significantly reducing fees for high-revenue diagnostic tests such as CT and MRI scans while dramatically increasing compensation for essential medical services that have been running chronic deficits, including maternal, pediatric, and emergency care.
On June 17, the Ministry of Health and Welfare held a public forum at the President Hotel in Seoul to unveil the proposed "Health Insurance Fee Structure Innovation Plan for Strengthening Regional and Essential Medical Care." The core of this reform is a rigorous adjustment of expenditures to identify areas where funds are wasted and reallocate them to where they are genuinely needed.
Minister Jeong Eun-kyeong stated, "We will establish a 'regional preference' principle in health insurance fees to ensure that citizens can receive timely, high-quality essential care even in rural or emergency situations. We will also shorten the adjustment cycle from the current 5-7 years to within two years to create a more responsive compensation structure that aligns with changes in the healthcare environment."
Yoo Jeong-min, head of the Ministry's Insurance Benefits Division, noted, "The skewed fee structure has led to a healthcare system focused more on diagnostic tests than essential medical care, resulting in excessive testing. The government will balance compensation levels across medical services and innovate the fee system to provide more substantial support for regional and essential medical care."
The government is targeting areas known for excessive compensation, particularly in laboratory tests and imaging services (CT and MRI). An analysis of accounting data from hospitals and clinics by the National Health Insurance Service revealed that for every 100 won spent, laboratory tests yield an average return of 190 won, while CT and MRI scans generate an average of 200 won. This indicates that hospitals have been receiving disproportionately high profits relative to the complexity and risk of these medical procedures.
As a first step, the government plans to reduce fees for tests that exceed a 150% return on costs to a uniform level of 150%. Further adjustments will be made by 2028 to align fees with actual costs. The government estimates that this initial adjustment alone could save over 2 trillion won ($1.7 billion) annually in health insurance finances.
The 2 trillion won saved will be reinvested into high-risk, low-compensation areas such as regional and essential maternal and pediatric care. To prevent the collapse of maternal care infrastructure, the government will enhance compensation for the entire prenatal process, from high-risk maternal management to delivery and neonatal intensive care. A new fee increase system for high-risk deliveries, such as cesarean sections, will also be established to help hospitals maintain a consistent delivery response system.
The plan also includes measures to improve the pediatric care environment. The age range for additional compensation for pediatric patients will be significantly expanded, and compensation levels will be increased. Additionally, compensation for pediatric intensive care and complex surgeries will be broadened. The government will also expand children's rehabilitation medical institutions and introduce performance-based compensation in the recovery rehabilitation medical system to prevent aftereffects following acute treatment.
The Ministry of Health and Welfare plans to refine the detailed proposals based on feedback from experts and consumer groups gathered during the forum, with a final plan to be confirmed by the Health Insurance Policy Review Committee by the end of the month.
On June 17, the Ministry of Health and Welfare held a public forum at the President Hotel in Seoul to unveil the proposed "Health Insurance Fee Structure Innovation Plan for Strengthening Regional and Essential Medical Care." The core of this reform is a rigorous adjustment of expenditures to identify areas where funds are wasted and reallocate them to where they are genuinely needed.
Minister Jeong Eun-kyeong stated, "We will establish a 'regional preference' principle in health insurance fees to ensure that citizens can receive timely, high-quality essential care even in rural or emergency situations. We will also shorten the adjustment cycle from the current 5-7 years to within two years to create a more responsive compensation structure that aligns with changes in the healthcare environment."
Yoo Jeong-min, head of the Ministry's Insurance Benefits Division, noted, "The skewed fee structure has led to a healthcare system focused more on diagnostic tests than essential medical care, resulting in excessive testing. The government will balance compensation levels across medical services and innovate the fee system to provide more substantial support for regional and essential medical care."
The government is targeting areas known for excessive compensation, particularly in laboratory tests and imaging services (CT and MRI). An analysis of accounting data from hospitals and clinics by the National Health Insurance Service revealed that for every 100 won spent, laboratory tests yield an average return of 190 won, while CT and MRI scans generate an average of 200 won. This indicates that hospitals have been receiving disproportionately high profits relative to the complexity and risk of these medical procedures.
As a first step, the government plans to reduce fees for tests that exceed a 150% return on costs to a uniform level of 150%. Further adjustments will be made by 2028 to align fees with actual costs. The government estimates that this initial adjustment alone could save over 2 trillion won ($1.7 billion) annually in health insurance finances.
The 2 trillion won saved will be reinvested into high-risk, low-compensation areas such as regional and essential maternal and pediatric care. To prevent the collapse of maternal care infrastructure, the government will enhance compensation for the entire prenatal process, from high-risk maternal management to delivery and neonatal intensive care. A new fee increase system for high-risk deliveries, such as cesarean sections, will also be established to help hospitals maintain a consistent delivery response system.
The plan also includes measures to improve the pediatric care environment. The age range for additional compensation for pediatric patients will be significantly expanded, and compensation levels will be increased. Additionally, compensation for pediatric intensive care and complex surgeries will be broadened. The government will also expand children's rehabilitation medical institutions and introduce performance-based compensation in the recovery rehabilitation medical system to prevent aftereffects following acute treatment.
The Ministry of Health and Welfare plans to refine the detailed proposals based on feedback from experts and consumer groups gathered during the forum, with a final plan to be confirmed by the Health Insurance Policy Review Committee by the end of the month.
* This article has been translated by AI.
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