South Korea: #18 in the 2022 World Index of Healthcare Innovation

Introduction

South Korea ranked 18th overall in the 2022 World Index of Healthcare Innovation, compared to 14th in 2021 and 19th in 2020. South Korea maintained similar rankings in Fiscal Sustainability, Quality, and Science & Technology compared to previous years, while improving its position in Choice.

Background

In 1977, South Korea mandated employer-sponsored health insurance for employees and dependents in businesses with more than 500 employees. Two decades later, in 1989, nearly all South Korean citizens had some form of health insurance coverage. Nevertheless, imbalances existed within the market — namely, larger health insurance funds sponsored by big businesses proved to be more stable than smaller funds and more rural insurance pools. These disparities worsened after the 1997 financial crisis. In 2000, the South Korean government addressed these problems by replacing the multi-fund, German-style health insurance system with a single, government-run insurer, the National Health Insurance Corporation (NHIC).

Today, the average actuarial value of NHIC’s insurance is around 65 percent. Cost-sharing and out-of-pocket payments represent approximately 35 percent of South Korea’s patient health spending. Moreover, patients pay entirely for healthcare services that are not part of the standard NHIC benefit package.

Quality

South Korea ranked 14th in Quality. This one-place improvement stemmed from Korea’s improvements in its WIHI rank for pandemic preparedness (5th). South Korea lost places in infrastructure, falling from 24th to 31st, and patient-centered care, dropping from 12th to 17th. On the other hand, South Korea ranked an impressive 7th in disease prevention for high vaccination rates.

Choice

South Korea’s rank in Choice fell from 6th in 2021 to 14th in 2022. South Korea ranked 8th in freedom to choose healthcare services and 22nd in access to new treatments. The South Korean system earned its lowest ranking in affordability of health insurance (29th), a big drop from 18th the year before.

Science & Technology

South Korea ranked 23rd in Science & Technology, the lowest across its four dimensions. In particular, South Korea performed poorly in fostering medical innovation and thus ranked 28th in scientific discoveries. However, South Korea’s adoption of electronic health records ranked slightly above the median, and its subscore for health digitization ranked 10th.

Fiscal Sustainability

South Korea ranked 14th for Fiscal Sustainability. South Korea’s strong economy contributed to a score above the median in national solvency at 14th. Still, its growing cost of medical care over the last decade contributed to a low ranking for growth in public health spending (25th). Overall, South Korea’s public healthcare spending ranked above the median at 12th.