5 trillion won deficit in health insurance eyed

Analysts believe the deficit at the National Health Insurance Corporation (NHIC) this year will amount to five trillion won, one trillion won more than the Ministry of Health and Welfare predicted.

A Millennium Democratic Party official said Wednesday that although the ministry estimated the insurance system to go four trillion won into the red this year on total outlays of 14 trillion won, the actual deficit would be five trillion won with a total of 15 trillion won in spending. A revised system of disbursement led to a seven percent hike in medical bills, he said.

Until the end of last year, the corporation signed contracts with individual hospitals and clinics on fees for over 2,300 kinds of treatment. A new system of paying medical expenses on the basis of relative criteria was later introduced. Under the system, a package contract is concluded on more than 3,200 kinds of treatment based on a point system. The change called for a seven percent medical bill increase, twice rate of price increases.

According to the party official, the increased and detailed expenses under the new payment system are not shown in the data the health and welfare ministry provided, even if the new payment plan based on relative costs was effective in preventing an individual contract from driving up the cost of treatment through lobbying.

As local hospitals and clinics administer treatment an estimated 30 percent more often than required and people consume 30 percent more drugs than necessary, strict monitoring of medical bills and controls over patients would accomplish economies of nearly 3 trillion won, he said.