Elsevier

Health Policy

Volume 85, Issue 1, January 2008, Pages 105-113
Health Policy

The National Health Insurance system as one type of new typology: The case of South Korea and Taiwan

https://doi.org/10.1016/j.healthpol.2007.07.006Get rights and content

Abstract

A typology is the useful way of understanding the key frameworks of health care system. With many different criteria of health care system, several typologies have been introduced and applied to each country's health care system. Among those, National Health Service (NHS), Social Health Insurance (SHI), and Private Health Insurance (PHI) are three most well-known types of health care system in the 3-model typology. Differentiated from the existing 3-model typology of health care system, South Korea and Taiwan implemented new concept of National Health Insurance (NHI) system. Since none of previous typologies can be applied to these countries’ NHI to explain its unique features in a proper manner, a new typology needs to be introduced. Therefore, this paper introduces a new typology with two crucial variables that are ‘state administration for health care financing’ and ‘main body for health care provision’. With these two variables, the world's national health care systems can be divided into four types of model: NHS, SHI, NHI, and PHI (Liberal model). This research outlines the rationale of developing new typology and introduces main features and frameworks of the NHI that South Korea and Taiwan implemented in the 1990s.

Introduction

A typology is the useful way of understanding the key frameworks of health care system. OECD has listed main principles that are required to be a good typology. First, it should be based on characteristics of the health care system that can be identified objectively from the name given to the scheme in a certain country. Second, it should be applied to all countries consistently so that schemes featuring similar characteristics can be grouped in the same category [1].

Several typologies of health care systems have been introduced [2], [3], [4], [5], [6], [7], [8], [9], [10]. A well-known health care system typology among these is the 3-model typology that classifies health care system into National Health Services (NHS), Social Health Insurance (SHI), and Private Health Insurance (PHI).

Although previous typologies delineate a country's the health care system in the world, any of those cannot appropriately explain the South Korea (referred to as Korea in this paper) and Taiwan health care system that were established through the integration reform since the 1990s. Health care reform in Korea has similarity to that in Taiwan in that considerable political pressure to put national health insurance structure in place was central to a stable democratic state in both countries. Korea and Taiwan have both been pluralist democracies only since the late 1980s. Korea was previously under military control; Taiwan was ruled by the Kuomintang [11].

In the process of implementing NHI, both countries passed through two major steps: extending coverage to the entire population and integrating previous social insurance programs. Before 2000 when NHI was implemented in Korea, multiple health insurers covered the segments of population. Health insurers for employees of corporation were established since 1977. A program for civil servants and private school teachers started in 1979, and health insurance societies for the self-employed were established in 1988 in rural areas and 1989 in urban areas. Therefore, the Korean corporatist SHI accomplished universal coverage in 1989.

In 2000, the 139 insurance societies for enterprises and the National Medical Insurance Corporation into which 227 insurers for the self-employed and program for civil servants and private school teachers emerged were integrated into the National Health Insurance Corporation [11], [12], [13].

Prior to NHI implementation, Taiwan already had a limited social insurance program in place. The gradual introduction of various employment-based insurance programs beginning in the 1950s expanded the numbers of those covered by social insurance, though coverage remained less than 50% of the population by the early 1990s. Political pressure on the Kuomintang party-state prompted the ruling party to move in the direction of universalizing health care in order to protect against the legitimacy crisis. The existing health insurance programs were integrated to establish a National Health Insurance in 1995 [11], [12], [14], [15].

Korea and Taiwan shared same goals in health care reform: equity in access to adequate care, social affordability, and improvement of efficiency [15], [16]. Above-mentioned similarities in the history of health care reform and common goals shared may bring in the Korean and Taiwan NHI System's unique features including a single insurer system, the strong state intervention, relatively much amount of government subsidies, and patients’ freedom of choice of physician [12], [17]. However, none of the existing typologies seem to succeed in capturing these unique characteristics. As a result, a call for new typology of health care system to describe Korean and Taiwan NHI is needed.

Section snippets

Overview of the typology on health care system

Field's Typology in 1973 classified the health care system into pluralistic, insurance, health service, and socialized types [2]. Followed by Terris et al., the NHS and SHI types of health care system were introduced. These two types were classified in terms of the concept of the health care provision. While the health care providers were government employees and the places where health care was provided were at the government hospitals and health centers in NHS, the health care providers in

Limitation of previous typologies

As shown the history of typology development in health care system above, 3-model typology has been used in the world since late 1970s. The 2004 OECD typology also corresponds typically to 3-model typology in that the public-integrated model is equivalent to NHS, the public-contract model to SHI, and the private insurance-provider model to PHI. Among the several typologies, 3-model typology has been relatively well-known and popularly used. The health care system of the UK and Sweden is NHS

NHI as a model of new typology on health care system

Variables used in previous typologies are the main financing source and the provision of health care service which need to be explained by the degree of state intervention. State intervention, however, should not just be viewed as a variable that classified financing and provision for structuring and functioning of health care system, but rather be considered as value embedded in the society. State intervention structuralizes the dominant social values prevailed in the society in which the

Conclusions

Previous studies related to the traditional 3-model typology explained the degree of state intervention into the health care system with two main variables: the main financing source and the provision of health care service. The financing source variable (i.e., public versus private) of the 3-model typology, however, has limitations: it is not only hard to explain the difference between the basic principles of financing sector in health care systems but also hard to make clear the degree and

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