Korea’s Health Expenditures as a Share of Gross Domestic Product Over-Passing the OECD Average / 보건행정학회지

ABSTRACT

This paper aims to introduce Korea’s total current health expenditure (CHE) and National Health Accounts of the year 2021 and their 2022 preliminary figures constructed on the basis of the System of Health Accounts 2011. As CHE includes expenditures for prevention, tracking, and treatment of coronavirus disease 2019 (COVID-19) and compensation for losses to medical institutions from 2020, the details are also introduced. Korea’s total CHE in 2021 is 193.3 trillion won, which is 9.3% of gross domestic product (GDP). The preliminary figure in 2022, 209.0 trillion won, exceeded the 200 trillion won line for the first time, and its “ratio to GDP” of 9.7% is expected to exceed the average of Organisation for Economic Co-Operation and Development member countries for the first time. Korea’s health expenditures, which were well controlled until the end of the 20th century, have increased at an alarming rate since the beginning of the 21st century, threatening the sustainability of national health insurance. The increase in health expenditure after 2020 is partly due to a temporary increase in response to COVID-19. However, when considering the structure of Korea’s health insurance price hike, where the ratchet effect of increased medical expenses works particularly strongly, it is unlikely that the accelerating growth trend that has lasted for more than 20 years will stop easily. More aggressive policies to control medical expenses are required in the national health insurance which not only constitutes the main financing sources of the Korean health system but also has the most powerful policy means in effect for changes in the health care provision.