Korea introduced three major health-care reforms: in financing (1999), pharmaceuticals (2000), and provider payment (2001). In these three reforms, new government policies merged more than 350 health insurance societies into a single payer, separated drug prescribing by physicians from dispensing by pharmacists, and attempted to introduce a new prospective payment system. The change of government, the president’s keen interest in health policy, and democratization in public policy process toward a more pluralist context opened a policy window for reform. Civic groups played an active role in the policy process by shaping the proposals for reform —a major change from the previous policy process that was dominated by government bureaucrats. However, more pluralistic policy process also allowed key interest groups to intervene at critical points in implementation (sometimes in support, sometimes in opposition), with smaller political costs than previously.
Strong support by the rural population and labor unions contributed to the financing reform. In the pharmaceutical reform, which was a big threat to physician income, the president and civic groups succeeded in quickly setting the reform agenda; the medical profession was unable to block the adoption of the reform but their strikes influenced the content of the reform during implementation. Physician strikes also helped them block the implementation of the payment reform. Future reform efforts in Korea will need to consider the political management of vested interest groups and the design of strategies for both scope and sequencing of policy reforms.
Soonman Kwon is Professor of Health Economics and Policy, and Director of the BK (Brain Korea) Center for Aging and Health Policy in Seoul National University, South Korea. After he received his Ph.D. from the Wharton School of the University of Pennsylvania, he was assistant professor of public policy at the University of Southern California in 1993-96. Prof. Kwon has held visiting positions at Harvard School of Public Health (Fulbright Scholar and Tekemi Fellow), London School of Economics (Chevening Scholar), Univ. of Trier of Germany (DAAD Scholar), and Univ of Toronto. He is on the editorial boards of Social Science and Medicine (Elsevier), Health Economics Policy and Law (Cambridge U Press), and Health Systems in Transition (HiT, European Observatory). He has occasionally worked as a short-term consultant of WHO, ILO, and GTZ (German Technical Cooperation) on health financing and policy in China, Cambodia, Lao PDR, Malaysia, Mongolia, Pakistan, Philippines, and Vietnam. He has also been a consultant of Korean government for the evaluation of its development aid programs in North Korea, Ecuador, Fiji, Mexico and Peru.