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2010-12-16

Lessons from Korean Health Care

As a recovering actuary, I've started using to my actuarial training again, like a dry drunk after ten years sobriety. What's the point of having been an FSA if you can't massage the numbers to "prove" your points (to paraphrase the war-mongering Madeline Albright)?


I've broken down and apart the monotonous text of a most interesting article hoping to make it more intelligible. Numbers people often fail to make their points by insulting their audiences with jargon and densely written prose. 'Tis a shame, because they often have salient points to make. If numerics give you headaches, read no further.
Abstract
South Korea is one of the world’s most rapidly industrializing countries. Along with industrialization has come universal health insurance. Within the span of 12 years, South Korea went from private voluntary health insurance to government-mandated universal coverage.
Since 1997, with the intervention of the International Monetary Fund, Korean national health insurance (NHI) has experienced deficits and disruption. However, there are lessons to be drawn for the United States from the Korean NHI experience.
(MG) one fourth generation war tactic to which the U.S. is supremely vulnerable would be for the world to tell the IMF to buzz off. The IMF has caused more misery and despair, world wide, than the cheney administration has caused in Iraq. The IMF (ignominious mother fuckers) should be disbanded, IMHO.

....
The United States can learn 4 lessons from the Korean experience with health care reform. The first centers on the question,

Is decentralization or unification more desirable for the initiation of an NHI program in the United States?
In Korea, neither of these 2 administrative systems has proven to be more efficient and effective than the other. Progressive policy experts and nongovernmental organizations (NGOs) insist that unification is logically preferable. However, even in a small country such as Korea, there have been serious problems after unification. Given the larger size of the United States, in both population and geography, (#1) it will be even more difficult to launch a unified administrative system in the United States.
The second lesson focuses on the newly recognized role of governmental policies in regulating the supply side of the market. Cost containment–centered government policies had worked effectively in Korea for 20 years until the IMF intervened in 1997. The Korean case shows that (#2) governmental cost containment in the absence of enhanced capacities for regulating the supply side of the market is no longer effective in controlling health care expenditures.
Korea’s success in developing NHI over 2 decades can be attributed to this policy of tightened cost controls by government. However, the Korean government failed to recognize the significance of the supply-side aspects of cost containment in maintaining the financial stability of NHI. The following examples of government failure to regulate the supply side of the market have resulted in excessively high health care expenditures in both Korea and the United States:
(1) a laissez-faire approach to practices by medical specialists,


(2) private sector–centered hospitals and clinics’ overuse of high medical technology, and


(3) multinational pharmaceutical enterprises’ campaigns promoting the use of expensive antibiotics and other drugs. Without successful regulation on the supply side, little financial stability in health insurance is possible, whether the insurance is nationalized or private.
(#3) The third lesson emphasizes the balance of power between the state and civil society. In Pharmacracy, Thomas Szasz writes, “The United States is the only country explicitly founded on the principle that, in the inevitable contest between the private and public realms, the scope of the former should be wider than that of the latter.7(pXXX) If the United States wants to establish any public system such as an NHI program, the state must, first of all, transform the current private-centered health care system into a public-centered one.
(MG) I'll have a WHOLE lot more to write about Szasz in the posts to come. He's a personal hero. Plus, a scientist who calls psychiatric medicine exactly what it is: pseudo-medicine.

The last lesson stresses the role of NGOs.
Many Korean NGOs, including progressive labor unions and health care–related professional organizations, aggressively called for government intervention in health care reform in response to the failure to regulate the supply side of the market. They asserted that market-driven health care reform in Korea weakened the financial structure of NHI.8As Beauchamp argues in Health Care Reform and the Battle for the Body Politic, “the purpose of reform is not simply to solve the health care crisis, but also to reconstruct the disorganized public.”9(p41) Given the strong interest-group influence, (#4) NGOs remain the only sector that can empower the public to demand a financially stable national health program, in Korea as well as in the United States. Furthermore, Korean and American NGOs should share their experiences in health care reform in order to strengthen their unique position in the health care system, independent of both governmental dominance and medical professional autonomy.

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