South Korea: #14 in the 2021 World Index of Healthcare Innovation

Introduction

South Korea ranked 14th overall in the 2021 WIHI Analysis. South Korea’s single-payer health system rose five ranks from the previous year — primarily due to an improved ranking in the Dimension for Science & Technology. South Korea performed best in the Dimension for Choice at 6th overall.

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, that 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; thus, cost-sharing and out-of-pocket payments represent approximately 35 percent of South Korea’s patient health spending. Moreover, patients pay entirely for health care services that are not part of the standard NHIC benefit package.

Quality

South Korea ranked 15th in the WIHI Dimension for Quality. This three-point drop stemmed from a decline in its most recent records for measuring preventable disease (analyzed in the Element “Measures of Preventable Disease at 6th) and a slight drop in “Patient-Centered Care” (from 11th to 12th). South Korea saw a slight improvement in the Element “Infrastructure” from 25th to 24th. Moreover, South Korea ranked 12th in the inaugural analysis for “Pandemic Preparedness and Response.”

Choice

South Korea rose two spots from 8th to 6th in the WIHI Dimension for Choice from 2020 to 2021. South Korea ranked 7th in the Element “Freedom to Choose Health Care Services” and 15th in the Element “Access to New Treatments.” The South Korean system earned its lowest ranking at 18th in the Element “Affordability of Health Insurance” (but up from 23rd the year before).

Science & Technology

South Korea ranked 25th in the Dimension for Science & Technology (the lowest across its four Dimensions). In particular, South Korea performed poorly in fostering medical innovation — as measured in the Element “Scientific Discoveries” at 28th. However, South Korea’s adoption of EHRs ranked slightly above the median, and its subscore for the Element “IT” ranked 13th.

Fiscal Sustainability

South Korea ranked 13th in the Dimension for Fiscal Sustainability. South Korea’s strong economy contributed to a solid score for the Element “National Solvency” at 9th. 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 Health Care Spending” ranked near the median of the WIHI Analysis at 15th.