The COVID-19 pandemic is an unprecedented challenge that underscores both the fundamental value of health and the importance of well-functioning and resilient universal health coverage. South Korea’s success in building such a system should encourage today's lower-income countries to make a similar commitment.
SEOUL – The COVID-19 pandemic has exposed inequalities and weaknesses in health systems both within and across countries. Most countries initially responded poorly to the crisis, and suffered heavy human and economic losses. But some in East Asia – including South Korea – performed relatively well. In fact, South Korea’s decades of efforts to build a resilient universal health-care system provide a model for today’s developing countries to follow.
For starters, policymakers in low-income economies should regard health as a fundamental human right that is critical for both personal development and a country’s sustainable economic growth. Healthier children are likely to perform better academically and become healthier, more productive adults. Likewise, establishing a robust and widely accessible health system is necessary to strengthen health security in the face of unpredictable shocks such as COVID-19.
The third goal established by the United Nations Agenda for Sustainable Development (SDG 3) commits all countries to work toward achieving universal health coverage (UHC), including access to quality essential health-care services and safe, effective, and affordable medicines and vaccines, by 2030. But the world is currently far from meeting these targets. More than half of the world’s people do not have full access to essential health services, and many countries are struggling to acquire sufficient COVID-19 vaccines for their citizens.
Moreover, governments should start investing in health care early in the development process. In the 1960s, when South Korea was still a low-income country, the government focused on making health-care services accessible, particularly in rural areas and poor communities. It established community health and immunization centers in every town and village, and developed a sufficient number of qualified professionals, including doctors, making them available everywhere. As a result of this strong investment, South Korea rapidly increased vaccination rates and contained many communicable diseases.
As South Korea’s experience shows, poorer countries should incorporate well-designed and effective health-development plans into their overall economic development strategies during their industrialization period. South Korea’s strong economic growth over several decades supported continuous public investment in its health system. At the same time, the rapid rise in household income boosted demand for health services, causing private clinics and hospitals to proliferate. As a result of its robust investment in medical infrastructure, South Korea now has 12.4 hospital beds per 1,000 people, compared to 2.9 beds per 1,000 in the United States.
The South Korean governments’ strong and long-standing commitment to UHC since the 1960s has made medical and health-care services more accessible and cost-effective. The government introduced a voluntary insurance system back in 1963, but a shortage of skilled staff and participating medical institutions undermined its effectiveness. In 1976, less than 10% of the population had health insurance.
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The following year, therefore, the government established a mandatory health insurance system for workers in large firms, along with a tax-funded Medical Aid (Medicaid) program for low-income citizens. The new scheme, which was gradually extended to include self-employed and informal workers, enabled South Korea to achieve UHC little more than a decade later, in 1989. Currently, 97% of the population is covered by National Health Insurance (NHI) and the remaining 3% by the Medical Aid program.
A sustainable financing mechanism has enabled continual investment in the health system, thereby ensuring efficient and equitable service delivery. The NHI system began with low contributions and low benefits, and gradually expanded its coverage. Today, the scheme not only covers treatment of illness but also provides services focused on disease prevention and health promotion and maintenance, and protects household income against excessive medical expenditure. All health providers are mandated to join the NHI, and to offer patients the same benefit packages set by the NHI law. COVID-19 patients in South Korea therefore do not need to worry about the cost of treatment and hospitalization.
Major reforms have strengthened the NHI system further. Previously, the system consisted of 370 insurance funds based on either firms or regions, which resulted in high administrative costs, unequal contributions, and limited risk-pooling. In 2000, therefore, the government merged these funds into a single-payer system, enabling the NHI to accumulate and use big data in order to provide customized health-management services more efficiently. The NHI’s data and support for South Korea’s COVID-19 monitoring system allowed the government to respond quickly and effectively to the pandemic and contain its spread.
Overall, South Korea’s universal, mandatory health-care system has delivered a remarkable improvement in health outcomes and protected citizens from epidemic threats. Since 1960, the infant mortality rate has fallen from 80 deaths per 1,000 births to fewer than three, while average life expectancy at birth has increased from 55 to 83 years. The system has also underpinned the country’s virtuous cycle of strong human-capital development and sustained economic growth over the past half-century.
The COVID-19 pandemic is an unprecedented challenge that underscores both the fundamental value of health and the importance of well-functioning and resilient universal health coverage. South Korea’s success in building such a system should encourage lower-income countries to make a similar commitment now.
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SEOUL – The COVID-19 pandemic has exposed inequalities and weaknesses in health systems both within and across countries. Most countries initially responded poorly to the crisis, and suffered heavy human and economic losses. But some in East Asia – including South Korea – performed relatively well. In fact, South Korea’s decades of efforts to build a resilient universal health-care system provide a model for today’s developing countries to follow.
For starters, policymakers in low-income economies should regard health as a fundamental human right that is critical for both personal development and a country’s sustainable economic growth. Healthier children are likely to perform better academically and become healthier, more productive adults. Likewise, establishing a robust and widely accessible health system is necessary to strengthen health security in the face of unpredictable shocks such as COVID-19.
The third goal established by the United Nations Agenda for Sustainable Development (SDG 3) commits all countries to work toward achieving universal health coverage (UHC), including access to quality essential health-care services and safe, effective, and affordable medicines and vaccines, by 2030. But the world is currently far from meeting these targets. More than half of the world’s people do not have full access to essential health services, and many countries are struggling to acquire sufficient COVID-19 vaccines for their citizens.
Moreover, governments should start investing in health care early in the development process. In the 1960s, when South Korea was still a low-income country, the government focused on making health-care services accessible, particularly in rural areas and poor communities. It established community health and immunization centers in every town and village, and developed a sufficient number of qualified professionals, including doctors, making them available everywhere. As a result of this strong investment, South Korea rapidly increased vaccination rates and contained many communicable diseases.
As South Korea’s experience shows, poorer countries should incorporate well-designed and effective health-development plans into their overall economic development strategies during their industrialization period. South Korea’s strong economic growth over several decades supported continuous public investment in its health system. At the same time, the rapid rise in household income boosted demand for health services, causing private clinics and hospitals to proliferate. As a result of its robust investment in medical infrastructure, South Korea now has 12.4 hospital beds per 1,000 people, compared to 2.9 beds per 1,000 in the United States.
The South Korean governments’ strong and long-standing commitment to UHC since the 1960s has made medical and health-care services more accessible and cost-effective. The government introduced a voluntary insurance system back in 1963, but a shortage of skilled staff and participating medical institutions undermined its effectiveness. In 1976, less than 10% of the population had health insurance.
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The following year, therefore, the government established a mandatory health insurance system for workers in large firms, along with a tax-funded Medical Aid (Medicaid) program for low-income citizens. The new scheme, which was gradually extended to include self-employed and informal workers, enabled South Korea to achieve UHC little more than a decade later, in 1989. Currently, 97% of the population is covered by National Health Insurance (NHI) and the remaining 3% by the Medical Aid program.
A sustainable financing mechanism has enabled continual investment in the health system, thereby ensuring efficient and equitable service delivery. The NHI system began with low contributions and low benefits, and gradually expanded its coverage. Today, the scheme not only covers treatment of illness but also provides services focused on disease prevention and health promotion and maintenance, and protects household income against excessive medical expenditure. All health providers are mandated to join the NHI, and to offer patients the same benefit packages set by the NHI law. COVID-19 patients in South Korea therefore do not need to worry about the cost of treatment and hospitalization.
Major reforms have strengthened the NHI system further. Previously, the system consisted of 370 insurance funds based on either firms or regions, which resulted in high administrative costs, unequal contributions, and limited risk-pooling. In 2000, therefore, the government merged these funds into a single-payer system, enabling the NHI to accumulate and use big data in order to provide customized health-management services more efficiently. The NHI’s data and support for South Korea’s COVID-19 monitoring system allowed the government to respond quickly and effectively to the pandemic and contain its spread.
Overall, South Korea’s universal, mandatory health-care system has delivered a remarkable improvement in health outcomes and protected citizens from epidemic threats. Since 1960, the infant mortality rate has fallen from 80 deaths per 1,000 births to fewer than three, while average life expectancy at birth has increased from 55 to 83 years. The system has also underpinned the country’s virtuous cycle of strong human-capital development and sustained economic growth over the past half-century.
The COVID-19 pandemic is an unprecedented challenge that underscores both the fundamental value of health and the importance of well-functioning and resilient universal health coverage. South Korea’s success in building such a system should encourage lower-income countries to make a similar commitment now.