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[Editorial] Does the National Health and Insurance Corporation Exist for the Livelihood of Its Staff?

[Editorial] Does the National Health and Insurance Corporation Exist for the Livelihood of Its Staff?

Posted January. 26, 2005 23:06,   


An inspection by the Board of Audit and Inspection (BAI) revealed that the National Health and Insurance Corporation (NHIC), which has an accumulated deficit of 1,500 billion won, maintained lax management of its personnel and budget. It is only natural that the NHIC should streamline its expenses through a restructuring process corresponding to a reduced workload since the computerization of major tasks in 2002. It is hard to understand why the NHIC maintains 227 branch offices, while the National Pension Corporation (NPC), which functions similarly, has 80. It is also hard to understand why the NHIC raised wages of its employees by 5.6 percent corresponding to the wage level of NPC, violating the government’s guidelines. It is unjustifiable as well that the organization illegally shared almost 10 billion won in overtime pay or lunch voucher fees.

The private sector is making an all-out effort to increase competitiveness through an intensive restructuring. Against this backdrop, one might question how the public sector, which is run by taxpayer money, can refute the accusation that it is squandering money for public health rather than trying to reform itself.

In particular, it is doubtful that the “behemoth” labor unions might fuel the moral hazard of the NHIC. It is questionable whether the management of the organization has any weak point that the labor unions can take advantage of, considering that it spent 2.7 billion won a year keeping full-time union leaders at seven times that of the government standard, and that it did not take any action in terms of personnel management against 10 former union leaders who had enough reason to resign.

The NHIC exists to embody the spirit of the Constitution, which stipulates the public’s right to health, not to maintain the livelihood of its staff. The country has an extraordinarily high rate of patient payments in medical treatment costs among the Organization for Economic Cooperation and Development (OECD) countries, although the public had no other option but to pay the premium for national health insurance, which increased 8.54 percent in 2003 and 6.75 percent in 2004. Management of the organization fails to manage doctor’s bills and medicine charges while social security, the basic function of insurance, is not guaranteed well. All this makes one question whether such an organization should exist.

The NHIC should waste no time in starting an intensive restructuring. The Ministry of Health and Welfare, the government agency in charge of the organization, is not immune from responsibility as well. If the ministry argues for an increase in the premium for national health insurance under the pretext of a deficit before the NHIC corrects its lax management policies, the public would not buy such argument.