Medical insurance deficit underestimated

Government estimates of the size of the deficit may be much lower than actual figures, taking into account the extra cost involved in the separation of dispensaries from hospitals and an officially sanctioned raise of 7.08 percent in medical and pharmacy bills.

Lee Hye-Hoon, a researcher with the Korea Development Institute, said the Health and Welfare Ministry earlier announced that the medical insurance fund would go almost four trillion won into the red but the sum might not have fully reflected the consequences of the medical sector separation. Lee, who also sits on the National Health Insurance Corporation committee for fiscal management, pointed this out in a recently published paper on financial measures aimed at shoring up the national health insurance plan.

The government`s estimates were based on insurance payments made in January but they covered only 26.83 percent of the bills for last December and January, causing payments in February and March to shoot up and thus generating much increased deficits. Insurance payments made in March were up 11.7 percent from January to 1.2 trillion won and up 14.12 percent from February to just over one trillion won.

According to Lee, a relative cost determination of medical bills and hikes in medical fees implemented this year will increase total outlays by inflating the types and volume of treatment.

Kim Han-Joong, dean of the Yonsei University Graduate School of Public Health, also told a forum of the Korea Society of Health Policy and Administration on Monday that a gap of two months exists between treatment and payment, subject to submission of bills to and their review by insurance authorities. He said that for this reason, the figures provided by the government tended to underestimate the results of rising medical fees.

The health-welfare ministry said that estimates of expenditures would be made again on the basis of the execution of the insurance budget through May because the original numbers made available before were not dependable.

Song Sang-Keun songmoon@donga.com