[INSIGHT]Idealism in the Cold Light of Day

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[INSIGHT]Idealism in the Cold Light of Day

Taxis, private tutoring and medical services?he government experimented with these important issues, using the public as guinea pigs, and bungled them all. The public would not be so angry had the failed experiments taught any constructive lessons. But one can only sigh at the problems spawned by depleted coffers since medical reforms were introduced to separate the practice of medicine from pharmaceutical dispensing and to merge medical insurance cooperatives. An issue with a seemingly admirable cause easily stirs up the public. When it is enforced prematurely without thorough preparations, it ends up creating greater harm. Why does the government still not know this?

In 1982, the authoritarian Chun Doo Hwan administration cracked down harshly on hapseung, Korea's custom of two or more passengers sharing the same taxi if their destinations happened to be along the same route. The government did this for the excellent reason of maintaining street order and promoting the citizens' convenience. But it was the passengers who suffered because it became more difficult to find a taxi; taxi drivers turned surly and refused to take passengers living in the outskirts of the city. People had to voluntarily offer to pay double or triple the fare in order to get a ride. At the time, a foreign news agency reported from Seoul, "Other countries are implementing all kinds of systems to save energy after the second oil crisis, but Korea is going the other way to abolish a creative and fine system called hapseung." I remember the article used the word "hapseung," for lack of a suitable substitute in English. The taxi issue remained a headache long afterward. The government, while keeping a low ceiling on the fares, repressed the demonstrating taxi drivers who protested they could not make ends meet, and ended up making things far more inconvenient for the public. The taxi issue was resolved only after the government allowed a hike in the fares and introduced call taxis, offering high-quality services at higher fares in 1992.

The ban on private tutoring, which was ruled unconstitutional last April, also was a debacle. Despite the fine intention of giving everyone an equal shot at college admission, what happened after it was outlawed? Illegal private teaching mushroomed, making it easier for the children of powerful and rich families to enter university and also raising the cost of private tutoring. All the government ban did was raise the cost of private education for everyone. The Economist, a British financial magazine, ran a special feature on the Korean economy at the time and reported that Korea is the only capitalist country with an economy of its size that bans private tutors. In any case, parents and students became the greatest victims of the educational reforms as the government, without attempting to raise the quality of public education, only chased seemingly good-intentioned causes. Its efforts finally resulted in the recent controversy over the College Scholastic Ability Test, which was too easy to identify the true abilities of the college applicants.

Now that the finances of the national medical insurance are in a shambles, it has become clear that those who opposed medical reforms were not just anti-reform conservatives. But they were ignored and condemned as anti-reform forces because the government's justification for enforcing the reforms - preventing drug overuse, putting an end to the rebates clinics and doctors pocketed, and making the people with higher incomes pay higher insurance premiums - sounded so good.

Now, let's study how people actually acted once the reforms went into effect. Workplace medical insurance cooperatives, whose reserve funds once amounted to 4.5 trillion won ($3.4 billion), used up almost all the reserves. Regional cooperatives, which had virtually no reserves in the first place, saw their finances further deteriorate. Uncollected premiums currently amount to 1.2 trillion won. Because of the planned merger of the two cooperatives, workplace cooperatives used up all their reserves and regional cooperatives did not try hard to collect premiums. The workplace cooperatives had no reason to leave a surplus and the regional groups had no incentive to work hard to collect the fees because the deficits would be covered with the money from the workplace cooperatives. With so many things that went awry, it will be difficult to go back to the situation before the reforms. If the government tries to repeal the reforms, the ensuing confusion and protests are going to be greater than those that prevailed at the time of their introduction. The majority of the people support a populist cause, but they turn into opponents when their delusions are about to be shattered. One proof is the protests against hikes in medical insurance fees.

But let's calm down and think carefully. When we recall the answers, we might be able to think about the reasons that the premiums should be raised and the introduction of private medical insurance considered, and also think about how we should go about solving the problems in the public medical insurance system.
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The writer is the chief economic news editor of the JoongAng Ilbo.

by Kim Su-gil

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