Governing universal health insurance in Korea and Taiwan

This article examines policy responses to the rising costs of healthcare in the Republic of Korea and Taiwan from a governance perspective. It tries to answer why the two countries responded differently to a similar set of challenges facing their National Health Insurance (NHI). While Taiwan – in an attempt to contain costs – introduced a global budgeting system, Korea failed to do so. Governments in both countries attempted to establish a new mode of governance, bringing multiple stakeholders to health policy making in order to build social consensus. But the Korean government, as this article shows, could not resolve its policy deadlock because of a loss of trust between the government and the medical profession, caused by the separation reform of 2001. Even though Taiwan was better able than Korea to address the financial challenges of its NHI, the new mode of health governance is still on shaky ground. This article argues that because neither government now enjoys the exclusive power over health policy that they once did under the developmental state, it is essential to find a way in which different stakeholders can make the necessary compromises that will enable the NHI to run on a sustainable path for the future.     

Economic crisis and social policy reform in Korea

The economic crisis that broke out in Korea in December 1997 has had a chilling impact on social development in the country. Today unemployment is the highest that Korea has experienced in the past thirty years. This paper aims to examine the impact of the economic crisis on social development and the role of public policy to mitigate the problems caused by the crisis. The economic crisis has hit vulnerable groups harder, increased the proportion of part-time and daily workers, and reversed the trend of steady improvement of income distribution. The economic crisis along with the trend of aging population, globalization, and competition calls for an expanded role of social policy, which the Korean government has neglected for a long time. The main targets of social policy reform in Korea include the expansion of government programs and safety nets for the unemployed and redesigning the national pension and health insurance scheme to provide adequate income security as well as to improve the system sustainability.     

Social Welfare Reform Since the 1997 Economic Crisis in Korea: Achievement, Limits, and Future Prospects

Social welfare reform has been implemented in Korea since the 1997 financial crisis. A dominant concern of the reform was on equality and social solidarity. A major means to this end was establishing universalistic social insurance programs like those in developed welfare states. The reform efforts produced some positive results but were not greatly successful. Income polarization and the deteriorating economic status of low-income families have become big social issues. Many low-income families have not gained many benefits from the reformed social security system. The rapid aging of the population is creating an exploding demand for social spending, risking the fiscal sustainability of major social insurance programs. The reform experience suggests that a social welfare system based on western-style universal social insurance may be too expensive to sustain and not very effective in protecting disadvantaged families in Korea. More attention is being paid to expenditure control and efficiency. Social insurance programs may need to be leaner than those in traditional welfare states. Targeted programs, such as the "making work pay" policy, are likely to be expanded more broadly to low-income families. The future of the Korean welfare state may hinge on successful employment support for working families and extensive investment in their human capital.     

Health Care in Asia and the Pacific: Increasing the focus on social health insurance

This paper focuses on health insurance reform within the broader frameworks of both social security and health services system development. In most countries in Asia and the Pacific, it is indeed the reform of the health services system, through policy changes in health care financing, that has led to an increased focus on health insurance. The underlying issue in this reform is the shift in responsibility that has taken place in most countries in the region over recent years. In the past, governments were responsible for financing health care for their populations. This shifted to defining, legislating and implementing an appropriate health care financing mechanism, presenting several challenges: to reach universal health insurance coverage through new initiatives for new populations, mainly the informal sector accounting for the majority of the population in almost all these countries; to apply provider payment systems that enable control over costs and the volume of utilization; and to strengthen primary health care as a foundation for rational utilization and more resources for prevention, including prevention of chronic diseases among the ageing population. This approach will require an active partnership between health insurance schemes and government that should reflect the new division of responsibilities to guarantee access to high-quality health care for all.     

Healthcare financing reform and the new single payer system in the Republic of Korea: Social solidarity or efficiency?

In July 2000, national health insurance in the Republic of Korea was transformed into a single insurer system. This major reform in healthcare financing resulted from the merger of more than 350 health insurance societies. Inequity in healthcare financing and the chronic financial situation of the health insurance societies for self–employed workers in rural areas have been the driving forces leading to the unified health insurance system. The unique institutional context together with political change opened the window of policy change, and various stakeholders such as politicians, rural self–employed workers, trade unions and civic groups were involved in the healthcare reform process. Fair income assessment of the self–employed and the role of the single insurer as a prudent purchaser of medical care will be vital for the new system to achieve its intended goal and improve social solidarity and efficiency of healthcare.     

Same same but different? Comparing institutional performance in the long-term care systems of Japan and South Korea

Responding to a rapidly aging population, Japan and South Korea introduced social insurance-based long-term care systems (LTCSs) in 2000 and 2008, respectively. Korea studied and took up key features of Japan's system while evolving along its own trajectory in line with its healthcare system. The aim of the present study is to unpack the broad category of ‘social insurance’ to explore how distinct system inputs and designs in Korea and Japan related to outcomes in performance measured in terms of coverage, quality of care, and sustainability. In doing so, the study serves as an important starting point for advancing a new stream of social policy research on the comparative performance of LTCSs. Our findings demonstrate that despite adopting a common system type, differences in implementation of the social insurance model (particularly in terms of financing and governance) contributed to divergent performance, with Japan outperforming Korea on most indicators during the observed period. This bears contrary implications for policymaking in the two countries: Whereas Japanese policymakers are faced with the challenge of promoting quality while containing spending, in Korea greater investment is required to strengthen the workforce and build up community care.     

Handicapped by old and new traps: Hungary's health care reform

Since the early 1980s, grave challenges have faced Hungarian health policy. The health status of the population stagnated between the mid-1960s and mid-1970s, and has dramatically deteriorated since then. In the 1980s the multidimensional crisis of the health care system deepened. Its overhaul must embrace every component: policy-making, ownership, financing, management, service structure, patient rights, medical education, etc. The main purpose of this paper is to describe how health policy has (or has not) responded to these challenges. First it summarizes the inheritance of the state-socialist regime, then it outlines the recent changes in social insurance legislation, and finally it compares official goals with the way the reform is actually proceeding. The paper is intended to discuss the connection between health care reform and the historic transformation of the political regime and the economy.     

Divergence in the development of public health insurance in Japan and the Republic of Korea: A multiple‐payer versus a single‐payer system

Japan and the Republic of Korea achieved universal health insurance coverage for their populations in 1961 and 1989, respectively. At present, Japan continues to operate a multiple‐payer social health insurance system, while the Republic of Korea has moved to an integrated single‐payer national health insurance structure. This article analyzes the influence of political economy in shaping the policy divergence found between these two Bismarckian health insurance systems. Issues addressed include differences in political power, the policy influence of business, the extent to which regional autonomy has developed and regional traits have been preserved, the level of political democratization, the form of political leadership, and the scale of development of the health insurance system. The article offers policy lessons derived from the two countries' experiences.     

Familialisation Effects of the State Welfare: Focused on the National Health Insurances in S. Korea and Taiwan

The national health insurances in Korea and Taiwan have maintained the dependent system that includes the insureds and their families. These two cases explicitly exemplify the familialism in East Asian welfare regime. However, comparing the two systems in detail, we can easily note the variation in their familialisation effects despite similar family realities in the two societies. To explain why Korea and Taiwan adopted the NHI of different institutional arrangements, this article focuses on the historical combination of the state's political and fiscal concerns and families' rational choice, which led to the variation in family policy.     

Social Protection in Greece: A Brief Glimpse of a Welfare State

This paper examines the delayed development of the welfare state in Greece and its restructuring since the early 1990s. The emphasis is on factors, such as the rapid shift from pre-Fordist to post-Fordist socio-economic structures, the weak development of contractual relationships and a solidaristic culture, and the extensive reproduction of a statist/clientelist form of social organization strongly linked to a high degree of social fragmentation and a particularistic appropriation of welfare benefits and services, which have hindered the full maturation of social citizenship in Greek society up to now. An expensive trend of social protection in conjunction with some major law reforms in the early 1980s contributed to the development of a “weak form” of universalism. These trends were soon overturned, however, well before Greek society could develop a welfare state, under the pressure of a serious fiscal crisis, low economic growth, increasing international competition, significant demographic changes and a fragile social consensus. Thus, the national health care system has hardly succeeded in establishing universal coverage, the social insurance system has remained highly fragmented and dualist, while policy measures for tackling increasing unemployment, hardship and poverty have been rudimentary. These have caused serious deadlocks and a deep institutional crisis. For this crisis to be overcome, it is essential that a new social balance promoting social solidarity is achieved in the country, while a reinvigorated Social Europe can help enormously in this direction.     

The construction of the medical insurance system in the Republic of Korea, 1963–1989

The task of bringing a whole population into medical insurance coverage is a challenging one for a country's health policy makers. The outcomes of health policy differ significantly from one country to another depending on each state's socio-economic and political background. Health policy in Korea is to a great extent incremental in character and the consequence of a variety of causal events. This is why it has been difficult to apply the established social welfare theories to the Korean case. In any event, the Korean national medical insurance system, constructed between 1963 and 1989, reveals some similarity to that in Japan, i.e., compartmentalization of financial and administrative units as well as inequality in contributions and benefits. The system also reflects Korea's traditional Confucian value which emphasizes mutual dependence between family members.     

The Dynamics of Welfare Policy‐Making in South Korea: Social Movements as Policy Entrepreneurs*

This paper analyzes the role of social movements in the creation and evolution of a welfare state in South Korea. We begin with a theoretical overview of the existing works on policy change, highlighting concepts such as ideas, policy paradigms, and windows of opportunity. We then examine state institutions, hegemonic policy paradigms, and the specific dynamics of welfare policy‐making during South Korea’s authoritarian period (1961–1987). Next, characterizing the democratic transition in 1987 and the economic crisis of 1997–1998 as “windows of opportunity,” we probe how social movements emerged as “policy entrepreneurs” and played crucial roles in building welfare institutions and promoting welfare policies. In particular, we focus on the role of social movements in legislating the National Basic Livelihood Security Act in 1999 and consolidating fragmented health insurance systems in 2000. We conclude that social movements in democratized South Korea have assumed the role of policy entrepreneurs, filling the vacuum left by the central government and elite bureaucrats in the field of social welfare policy‐making.     

Germany's Social Long-term Care Insurance: Design, Implementation and Evaluation

Across all industrialized countries, issues surrounding population ageing have captured the attention of policymakers. Among its manifold ramifications, disability-related poverty and the projected growth in public funding of long-term care demand close attention. Comparative studies have revealed distinct policy approaches to long-term care across different countries, but a shared interest in market-oriented policy design and cost containment. In Germany, legislation on mandatory and universal dependency care insurance came into force recently. The 1994 Dependency Insurance Act responded to limited market insurance against the financial risk of long-term care, deficiencies in servicing long-term care dependants and the fiscal crisis of German communities, which had to provide social assistance to a growing number of destitute care clients. The new social long-term care insurance scheme adopts basic features of existing German social insurance schemes even as it challenges the country's social insurance legacy in terms of cost containment strategies and consumer-directed provision. After three years of operation, the new programme is technically in place and financially healthy. However, critics point to its tight screening procedures, persistent shortages in the supply of formal care, and fraud. Equity issues, quality of care and consumer direction have also drawn critical attention. A variety of scenarios for programme improvement are conceivable. Coverage could be extended and payments offered to family caregivers. A comprehensive "cash and counselling" concept should be developed. Finally, programme efficiency depends on public accountability and quality auditing. Choice should be informed by ongoing research into long-term care and the broader impacts of long-term care policy.     

Advocacy Coalitions and Health Politics in Korea

This article analyses the political dynamics underlying health care reform in Korea after the Asian economic crisis. The reform was a significant volte‐face in respect of the social policy paradigm, which now aims to enhance equity in National Health Insurance. The article pays special attention to the evolution of the advocacy coalition for equity in health policy and how it developed the two attributes required for successful policy change: institutional strength and the elaboration of policy rationale for reform. This process was not a simple linear development but a combination of setbacks and advances. The article also takes into consideration the structural conditions that set the policy environment over the course of the advocacy coalition's evolution since the 1960s. In short, the policy reform of 2000 was not a simple policy change in response to the economic crisis, but rather the outcome of the long‐term evolution of the advocacy coalition for equity in health policy.     

Social Policy in Greece: Rhetoric versus Reform

This paper reviews the major social policy developments in Greece during the 1980s and 1990s, focusing on social security, health and employment policies. It argues that the concept of social policy and the practice of politics have been distorted in this country. Social policy reflects the legacy of a heavily politicized and centralized policy‐making system, an impoverished administrative infrastructure and poorly developed social services. Its emergence is characterized by the pursuit of late and ineffective policies. It lacks continuity, planning and coordination, being oriented towards short‐term political expediency. It is largely insurance‐based, reproducing huge inequalities and institutional arrangements which are behind the times. It provides mainly cash benefits, low‐quality but rather expensive health services and marginal social welfare protection. Moreover, the lack of a minimum income safety net confirms the country's weak culture of universalism and social citizenship. By implication, complex policy and interlocking interest linkages have tarnished the “system” with a reputation for strong resistance to progressive change. At the same time, sources of change such as globalization, demographic developments, new household and family/gender patterns, unstable economic growth, fiscal imperatives, programme maturation, as well as persisting unemployment, changing labour markets and rising health care costs, have produced mounting pressures for welfare reform.     

Development of Social Health Insurance in Mongolia: Successes, Challenges and Lessons

This paper examines the process of developing social health insurance in Mongolia, and its successes, challenges and lessons. The government of Mongolia introduced social health insurance in 1994, which is compulsory for all public and private sector employees and low-income and vulnerable population groups. The scheme also provided voluntary insurance for unemployed people of working age. About 95 per cent of the population was covered by health insurance within the first two years thanks to a high level of government subsidy for vulnerable population groups. The insurance benefit initially covered nearly all inpatient services except the treatment of some specified chronic and infectious diseases, which were directly funded by the government. The scheme not only had many successes but also faced challenges in maintaining universal coverage. The new financing arrangement has provided little financial incentive for healthcare providers to contain health expenditure, contributing to rapid health cost inflation. In addition to reforming the payment system for providers, there has been an increasing need to expand benefits into ambulatory care. The development of compulsory health insurance in Mongolia shows that a prepaid health insurance mechanism based on risk sharing and fund pooling is feasible in low-income countries given political commitment and government financial support for vulnerable population groups.     

Social health protection in Cambodia: Challenges of policy design and implementation

The Government of Cambodia is implementing ambitious reform initiatives to improve the country's social health protection system. In January 2018, it was announced that the Health Equity Fund (HEF), which is fully subsidized by a joint government‐donor initiative for the reimbursement of user fees for the poor at public health facilities, is to be expanded to some segments of informal workers belonging to associations, as well as to commune and village chiefs. Since 2017, the National Social Security Fund (NSSF) has provided social health insurance for formal economy workers in enterprises with eight employees or more. In January 2018, it was expanded to civil servants and all employees regardless of the size of the enterprise. However, this article highlights that the new ambitious reforms are not accompanied by careful planning as regards funding, service delivery, human resources and institutional design. This article therefore aims to examine key policy issues and challenges for Cambodia's ambitious reform of its social health protection system in terms of resource generation, population coverage, strategic purchasing and governance.     

Welfare reform and future challenges in the Republic of Korea: Beyond the developmental welfare state?

Since the economic crisis of 1997–98, the Republic of Korea has carried out vigorous social policy initiatives including the reform of the National Pension Programme and National Health Insurance. This paper seeks to answer whether the country's welfare state has moved beyond welfare developmentalism, by examining the cases of those two programmes. By the reform, the coverage of the National Pension Programme was extended to the whole population; and its financial sustainability and accountability were enhanced. Regarding National Health Insurance, efficiency reform was carried out on the management structure, while reform regarding financing was put on hold. These reforms were in clear contrast to the welfare developmentalism that used to place overwhelming emphasis on economic considerations. Despite these reforms, however, the Republic of Korea's welfare state faces the issues of ineffectual implementation and lack of financial sustainability of social policy. The National Pension Programme has failed to cover the majority of irregular workers, whose numbers are on the increase, and National Health Insurance needs to find a way to meet increasing health expenditure.     

Extension of social insurance coverage to informal economy workers in China: An administrative and institutional perspective

This article reviews administrative issues in the context of decentralized social protection in China. In particular, what are the main obstacles to expanding social insurance coverage for workers in the informal economy? Over the last two decades, China has achieved remarkable progress toward universal social protection when this target was set as a national policy priority. However, the social insurance enrolment of informal economy workers still lags significantly behind. This article reviews the application of the International Labour Organization’s definition of informality in the Chinese context and overviews existing pension and health insurances in China. This article discusses the impact of China’s inter‐governmental fiscal relations and decentralized social protection in the multilevel government system. The article highlights that under a system of decentralized managed social insurance many informal economy workers choose to opt out of the system because of low benefits and high compliance costs. This result in deficits in social insurance coverage amongst informal economy workers.     

The health care system of the People's Republic of China: Between privatization and public health care

Chinese health care policy has undergone numerous reforms in recent years that have often led to new challenges, inciting the need for further reform. The most recent reforms attempt to find a middle path between public health care provision and commercial private insurance. In this way, China is following in the footsteps of countries that initially increased the role of privatization in the 1990s and at the beginning of the 21st century, but are now gearing towards public health care. However, this process of constant reform has led to a lack of transparency in the functioning of the health care system, provoking a loss in public trust. There remains an important degree of uncertainty about the future direction of developments in China. Nonetheless, a dual financing approach to health care using tax finance and social insurance might yet crystallize, offering a potential model to inform developments in other countries.