Since 1989, South Korea had had universal insurance coverage, and in 2000 it merged all medical insurance societies into the National Health Insurance Service (NHIS), which became a single-payer system in 2004. According to Bloomberg, the South Korean healthcare system is regarded as the fourth most cost-efficient in the world behind Hong Kong, Singapore, and Spain.
The NHIS, which is funded by individual contributions, government subsidies, and surcharges on tobacco, provides lower-cost coverage than most other developed countries, even as life expectancy is the 11th highest in the world.
Employees contribute about 6.1% of their income, while contributions from the self-employed are calculated based on their income level and property ownership. NHIS covers 40-70% of outpatient and 80% of inpatient costs and also reimburses the excess amount of out-of-pocket payments based on the patients’ income.
Even though over nearly all South Korean hospitals are private, all hospitals are not-for-profit by the law and they are paid on a fee-for-service basis by the NHIS. The government does not provide subsidies directly to hospitals.
The efficiencies of the system come with a cost since the system is operating on a low-contribution, low-benefit model. In South Korea, out-of-pocket costs to patients is a higher share of the cost than in most other OECD countries. While NHIS covers a breadth of diseases, it does not cover certain costs, such as MRI, ultrasound, and private rooms. Because of the basic level of benefits covered by NHIS, according to OECD, 37% of healthcare spending in South Korea is paid for directly by households.
51.3 million(2016, World Bank)
$1,411 billion(2016, World Bank, USD)
- Healthcare Spending:
$104.4 billion(2016, Brocair estimate, USD)
- Healthcare Spending as % of GDP:
7.4%(2014, World Bank)
- Annual Healthcare Spending Per Capita:
$2,035(2016, Brocair estimate, USD)