Aging and Health Policy in Korea IAGG, Seoul June 24, 2013

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Aging and Health Policy in Korea

IAGG, Seoul June 24, 2013

Soonman KWON, Ph.D.Dean

School of Public Health Seoul National University, Korea

S. Kwon: Aging and Health Policy, Korea

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OUTLINE of Presentation

I. Challenges of Population Aging

II. Health System in Korea

III. Health Expenditure for Older People

IV. Long-term Care System in Korea

IV. Policy Recommendations


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I. Challenges of Population Aging

Rising demand for health and long-term care - Health status, mental health, disability- Live longer with lower health status in Korea

Declining family support- Increased labor participation of women- Increased number of older people living alone

Insufficient financial capacity of the elderly- Limited pension and public assistance for the elderly

Old-Age Dependency (65+/(20-64))


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Self Assessed Health (unit:

%)very

goodgood fair bad

very

bad

65~69

yrs3.7 39.7 20.9 31 4.7

70~74

yrs2.6 31.3 21.7 38.4 6

75~79

yrs1.5 25.8 21.8 43.1 7.7

80~84

yrs1.5 25.2 21.6 40.5 11.2

85 yrs + 1.2 27.6 22 39.6 9.7

Source: 2011 National Elderly Survey (Sample size 10,544)

5S. Kwon: Aging and Health Policy, Korea

Prevalence of Chronic Diseases

(unit: %)

None One Two Three

or more

Average

(number

)

65~69

yrs16.5 23.0 24.4 36.1 2.1

70~74

yrs11.3 19.1 23.6 46.1 2.6

75~79

yrs7.6 17.9 23.5 50.9 2.8

80~84

yrs6.5 20.8 24.1 48.7 2.8

85 yrs + 10.8 20 25.7 43.5 2.4

Source: 2011 National Elderly Survey

6S. Kwon: Aging and Health Policy, Korea


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II. Health System in Korea

1. Health Care Financing

Universal coverage of population thru social health insurance (SHI) since 1989

Lower benefit coverage: Out-of-pocket payment amounts to 35-40% of total health expenditure

Fee-for-service reimbursement by the insurer: increase in quantity and intensity of care

Rapid increase in health expenditure: highest in OECD

Health Expenditure and Insurance Contribution Rate

2004 2005 20062007

2008 2009 2010 2011

Health Ins Contribution Rate (%)

4.21 4.31 4.48 4.77 5.08 5.08 5.33 5.64

Total Health Expenditure as % of GDP

5.38 5.72 6.04 6.30 6.46 6.92 6.93 -

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Source: NHIC, Health insurance DB & The World Bank DB



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Some Protection Mechanisms

- Discounted copayment: elderly, children under 6, patients with chronic conditions (e.g., renal dialysis)

- 5% OOP pay for catastrophic conditions: e.g., cancer

- Exemptions of copayment: the poor (Medical Aid)

- Ceiling on out-of-pocket payment for covered services: 3 different ceilings for 3 income groups (lower 50%,

middle 50-80%, upper 80-100%) -> will be further segmented based on income


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2. Health Care Delivery

Private delivery (More than 90% of hospitals are private)

Lack of coordination and differentiation- Outpatient and inpatient- Primary care physicians and specialist- Acute care hospitals and long-term care

hospitals- Long-term care hospitals and long-term care

facilities


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III. Health Expenditure for Older People

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Health Expenditure of Older People

Source: Health Insurance Statistics, 2002~2012

H Exp per old person (1,000 KRW)

H Exp per person (1,000 KRW)

Elderly H exp as % of Total H Exp

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Health Expenditure per Capita by Age Groups

Source : NHIC. Health Insurance Statistics 2001~2011.


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Controversies over the Impact of Aging on Health Expenditure

a. Health status of the elderly improves

b. Medical cost towards the end of life: Proximity to death has bigger impact than

demographic change (medical cost does not rise uniformly with increasing patient age)

- Hospitalization (vs. dying in LT care institutions) is a key factor for medical cost

- Physician behavior and clinical decision on treatment at the end stage of patient life has a crucial impact on medical cost of the elderly

-> Importance of end-of-life care

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Health Expenditure at the Last Year of

Life

Note: data of 2008

Source: HC Sin, MY Choi and BH Tchoe, “Health expenditure at the end of life” Korean J. of H Policy & Adm

22:1, 2012, 29-48

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IV. Long-term Care (LTC) System

1. Structure of LTC Insurance

Covers LTC of 65+ and (only) age-related LTC of the others (<65)

Contribution rate: 4.05% of health insurance contribution (2008) -> 4.78% (2009) -> 6.55% (2010, 2011)

Financing mix- Government: 20%; Contribution: 60-65%; - Copayment: 20% (institution), 15% (home-

based) -> exemption or discount for the poor

S Kwon: Aging and Health Policy, Korea

2. Population Coverage

July 2008 July 2009May

2010April 2011 June 2012

No. Certified

to be Eligible

(% of the

Elderly)

146,643

(2.9%)

268,000

(5.2%)

308,000

(5.7%)

318,000

(5.8%)

327,766

(5.7%)

No. Used

Services

(% of Those

Eligible)

78,000

(53%)

184,000

(69%)

245,000

(79%)

280,000

(88%)

318,266

(97%)

Source: NHIS, LTC insurance statistics

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3. Type of Benefits

Service benefit in principle, cash benefit in exceptional cases (e.g., when no service providers in the region)

- Cash benefit can promote consumer choice and the role of family, but potential abuse?

Payment to providers - pay per hour: visiting care, visiting nursing - pay per visit: visiting bath - pay per day: institutional care, day/evening care

Ceiling on benefit coverage for non-institutional care: depending on the (three) levels of functional status 18


4. Assessment

3 levels of functional status: Level 1 (very severe), Level 2 (severe), Level 3

(moderate)

Government planned to cover only levels 1 and 2 initially

- Parliament passed the law to cover level 3, too-> But level 3 is eligible only for visiting/home-based

care

As of June 2012- Among those who are certified to be eligible: 12% level 1 (most severe), 22% level 2, 66% level

3

(in April 2011: 14% level 1, 23% level 2, 63% level 3)19


4. Assessment (continued)

Visiting team from NHIS (National Health Insurance Service) branch offices,

Annual assessment, 56 evaluation items

Assessment committee in the regional offices of NHIS:

less than 15 members including social worker, and medical doctor (or traditional medical doctor)

Decision of the committee is based on - Assessment (ADL) made by a visit team,

using algorithms - Doctor’s report 20

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5. Key Issues/Challenges of LTC Insurance - Assessment of functional status (3 levels): defines

eligibility and benefit levels for LTC insurance, but not fully accounts for health and long-term care needs of older people

- Cost containment: compared with health insurance?

- Types of benefits: cash benefit vs. service benefit

- Balance between institutional care and community-based (CB) care: Current benefits for community-based care are mainly provided by visiting LTC providers

-> need to expand the outpatient care of LTC facilities


Labor Market for LTC Providers

Excess supply of training programs and LTC workers-> Problems associated with quality of care and work

conditions of care workers: low pay, job stress, non-regular workers (e.g., more than half of care

workers in ambulatory LTC providers)

Number of LTC workers certified: 70,355 (June 2008) -> 1,200,000 (May 2013), Number employed, about 260,000-> Need to tighten the requirement for licensure and

training institutions

Shortage is not an issue yet, but how about in the future?

- Typical 3D jobs


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Coordination between H Ins and LTC Ins Health insurance covers long-term care hospitals

(LTCH)

Long-term care (LTC) insurance covers long-term care (residential) facilities (LTCF)

Types of patients in the LTCH and LTCF are not clearly differentiated

- Excess competition due to low entry barrier (e.g., low requirement for personnel and building, etc.)

- Limited enforcement due consumer choice in the insurance system

- Reduced fee (as provider incentive) for over 180 days of stay in LTCH: consumer incentives to stay longer


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　Number

65+(A)

Number 65+ in LTCH(B)

C=B/A

Number 65+ in LTCF(D)

E=D/A

20105,452,000

(100)

106,739

(100)2.0%

54,119

(100)1.0%

20115,656,000

(103.7)

166,887

(156.4)3.0%

98,327

(181.7)1.7%

20125,890,000

(108)

197,597

(185.1)3.4%

116,969

(216.1)2.0%

Number of Older People in LTC Hospitals (LTCH) and LTC Facilities

(LTCF)

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LTC Hospitals LTC Facilities

2010(n=672)

2011(n=753)

2012(n=866)

2010(n=1,640

)

2011(n=2,706

)

2012(n=3,386

)Urban/Rural

　

Urban 85.4 85.9 85.8 76.6 78.9 79.1

Rural 14.6 14.1 14.2 23.4 21.1 20.9

LTCH Size

[LTCF Size]

-99 beds[-9

residents]39.1 34.0 30.8 29.4 34.4 38.7

100-200beds [10-

30 residents]

46.3 47.7 50.2 26.0 29.0 27.1

200+ beds [30-100

residents]14.6 18.3 18.9 37.9 31.8 29.6

[100+ residents]

　　　　 6.8 4.8 4.5

Characteristics of LTC Hospitals

and LTC Facilities (Unit: %)

I USD = 1,100 KRW 26

Expenditure in LTC Hospitals and LTC Facilities

LTC Hospitals LTC Facilities

2010(n=106,739)

2011 (n=166,887)

2012(n=197,597)

2010 (n=54,119)

2011(n=98,327)

2012 (n=116,969

)No Days per person per

yr170 158 155 258 254 222

Expenditure per person

per day 65,608 69,501 71,387 43,183 42,508 43,279

Expenditure per person

per yr (KRW)

11,190,053(100.0%)

10,823,579(100.0%)

11,005,136(100.0%)

11,174,026(100.0%)

10,905,369(100.0%)

9,720,830(100.0%)

Out-of-pocket

payment

2,170,647(19.4%)

2,100,712(19.4%)

2,155,083(19.6%)

1,412,092(12.6%)

1,492,790(13.7%)

1,363,292(14.0%)

Payment by public

insurance

9,019,406(80.6%)

8,722,867(80.6%)

8,850,053(80.4%)

9,761,934(87.4%)

9,412,579(86.3%)

8,357,538(86.0%)


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V. Policy Recommendations

1. Governance and Leadership

Need government commitment to mainstream aging issues and adopt and implement relevant policies

Increase the awareness of aging and increase policy priority on the health of the aging population

Coordination of various policies and programs across government ministries and agencies

- Local government- Health insurance and LTC insurance- Coordination among different components of health system,

such as financing, service delivery, and HR


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Health Promotion Master Plan 2020

Targets for Older People in 2020

- Functional disability: IADL 27.0%, ADL 11.4%- Dementia: 9.2%- Flu vaccination: 82.5% - Screening and check-ups: 74.1% in 2020- Falls: 16%

Other measures include health behavior such as drinking, physical exercise, nutrition, dental health, etc.


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2. Service Delivery

Service delivery system needs to be re-oriented to meet the health and long-term care needs of the elderly

- Coordination between health care and long-term care- Empower community-based care system-> Should introduce effective continuum of care

Building health and long-term care facilities for older people should be based on need assessment, assessment of the efficiency of existing providers, and careful planning to avoid over-reliance on institutional care

- Problems of rapid increase in LTC hospitals- Need effective regulatory policy for private providers


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Problems of Acute Care-Oriented Facility-Based Service Delivery System

Patients prefer large tertiary care hospitals- Recent policy to increase benefit package for catastrophic

illnesses may aggravate the problem

In total health insurance expenditure, share of- Physician clinics: 46.3% in 2001 -> 29.6% in 2010- Tertiary care hospitals: 16.5% in 2001 -> 22.9 in 2010

Inefficiency: cost inflation due to the utilization of more expensive services in tertiary care hospitals

<- problems due to fee-for-service paymentInequity: financial barrier for the poor


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3. Human Resource for Health

Education and training for health professionals need to be re-oriented to respond to the needs of the elderly, cope with multi-morbidites and collaboration as a team

Curriculum needs to be extended to geriatric health, health promotion, NCD management, functional disability, rehabilitation, and health education for the elderly

Strengthen primary care and gate-keeping

Training of long-term care providers and support and education program for family care givers


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Need to Strengthen Primary Care System

Most physicians are board certified specialistsMany of specialists practice in a clinic in communities-> No gatekeeper

Physician clinics and hospitals compete rather than coordinate

- Physician clinics have (small) inpatient beds- Hospitals have huge outpatient clinics-> Fragmentation of care, duplication

Those problems become more and more serious in an era of rapid population aging – Limited Continuum of Care


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4. Political Economy of Reform

Korean Medical Association does not support primary care physician system

- Only some specialties (e.g., family medicine, internal medicine) support the strengthening of gate-keeping primary care physicians

-> Need effective strategy for policy change

Participation of physicians in chronic disease management program is low

- Potential conflict between physicians and public health center: competitor or coordinator?

- Lack of trust among government, providers, Nat H insurer


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THANK YOU !!!

Prof. Soonman KWON

[email protected] (Seoul National Univ.)http://plaza.snu.ac.kr/~kwons (Homepage)

mailto:[email protected]

http://plaza.snu.ac.kr/~kwons

Documents

Aging and Health Policy in Korea IAGG, Seoul June 24, 2013