[VIEWPOINT] First Revive the Health Care System

The National Health Insu-rance, which had ushered in a health care and welfare society by giving the people greater access to medical care, is in grave crisis. According to the government's announcement, health insurance finances are expected to suffer from about 4 trillion won ($3.2 billion) in deficits, and go bankrupt in a couple of months. As many people suspected, it is true that the hikes in medical treatment charges, which were introduced to enforce the medical reform of separating medical practice from pharmaceutical dispensing, is one of the causes of the financial crisis. But an analysis shows other causes are more to blame.

First, the greatest cause stemmed from the medical reform of separating the roles of doctors and pharmacists. Before the reform, patients paid all the costs of medication, and the aggregate number of visits was about 100 million per year. Since the reform, however, patients are using medical insurance both at hospitals and pharmacies, hiking the projected additional insurance expenditures to about 2.5 trillion won. Such medical treatment fees as medical examination, tests, prescriptions, and drug compounding are also eligible for insurance. This is raising covered medical outlays for patients at a rate far above the rate of increase in medical fees.

The government's claims that medical reform would trim medical costs and that there would be no additional financial burden on the people proved to be a clear error of judgement.

Second, the deficits in insurance finances did not appear suddenly after the medical reform. The deficits, which begun in 1996, totaled about 1.2 trillion won last year. Aside from the additional costs caused by the medical reform, deficits were expected to reach 1.5 trillion won this year. The deficits kept steadily accumulating because the government, for the last five years, implemented policies focused more on promoting the public's convenience than on raising insurance revenues, thus increasing financial expenditures.

Third, the moral hazard that emerged in the process of merging the nation's medical insurance cooperatives also played a role. The expenditures at workplace-based medical insurance cooperatives were soaring, but the cooperatives did not raise the premiums because they wanted to spend as much of their reserves as possible before their scheduled merger at the end of this year. The cooperatives even lowered the monthly premiums from 3.86 percent to 2.8 percent last July. Then there is the increase in the aging population and a greater use of medical facilities due to this expansion, another cause for the swelling expenditures.

The reasons for the health insurance deficits, only now a national issue despite several years' of losses, is the use of the reserves to make up for the shortfall. The crisis is leading to calls for a fundamental reform of the medicare system by introducing private medical insurance programs, overhauling the insurance system, and deferring medical reform. But the situation is too dire for the talk of long-term measures. That would be comparable to advising an emergency room patient taking his last breath to exercise more to maintain better health.

Instead of trying to conceal its policy failure, the government has to honestly disclose the reasons for the bankrupt insurance finances, present the countermeasures and seek the people's understanding. Of the expected deficits, the government should assume 2 trillion won?bout half of the total?s a way of taking responsibility for its failed policy and procure an additional trillion won by raising the premiums set at low rates compared with the income level of the subscribers.

Medical facilities, pharmacies, and insurance subscribers should come up with the remaining 1 trillion won through joint efforts. The medical sector particularly has to shift its management paradigms focused on maximizing earnings to minimizing costs to gain the people's trust. It also has to refrain from taking action that invite criticism from the press and the public. And then, the government has to thoroughly evaluate the effects of merging and medical reform, and present fundamental measures for systemic change.

But if the government does this, the people would find it hard to contain their fury, considering how they have put up with the greatly inconvenient medical reform plan and paid their monthly dues. But there was a time in this country, before the introduction of a national medical insurance system, when receiving doctor's treatment was a mere dream for the majority of the people.

We cannot deny that the medical insurance system allowed the people to receive medical treatments without great financial burden. Without the medical insurance, not many households would have the financial means to receive the necessary medical treatment. Trying to pinpoint the culprits to heap recrimination is not going to help revive the crippled health care system.

The first priority lies in repairing the system. We cannot go back to the 1960s when hardly anyone could afford medical treatment.

The writer is the dean of the Graduate School of Health Science and Management at Yonsei University.

by Kim Han-joong