Korea mulls service fee hike for 1,000 critical surgeries

Jeong Kyung-sil, who heads the health care reform committee under the Health Ministry, speaks during a press briefing held at the government complex in Seoul on Tuesday. (Yonhap)

The Health Ministry said Tuesday that medical service fees for complex but essential surgeries, often undervalued despite their high skill and resource demands, will be raised possibly starting early next year. This initiative seeks to correct the long-standing pay disparities in a country where compensation for cosmetic procedures at private clinics is often higher than critical, lifesaving surgeries.

The discussion took place during the medical reform committee meeting earlier in the day, which focused on establishing a fair compensation system for essential medical services.

Amid continued requests from the medical circle to increase medical service fees -- the fees charged by health care providers for medical services rendered -- Jeong Kyung-sil, who heads the health care reform committee under the Health Ministry, said the government is considering raising compensation for around 1,000 high-complexity surgeries carried out in tertiary and general hospitals.

She did not provide further information on the types of surgeries the new scheme would apply to but noted that compensation for complicated cancer surgeries would be included. Jeong added that the government plans to finalize and implement the specifics by January next year after collecting feedback and opinions from the medical community.

"Also, (the government) plans to come up with a detailed roadmap for updating the payment rates for medical practices that are currently underpaid to ensure that they are set at fair and appropriate levels," Jeong told reporters during a briefing.

Jeong added that a medical service fee analysis committee has been created within the health insurance policy review committee to adjust the reimbursement rates for medical services based on scientific evidence.

Currently, Korea uses a fee-for-service payment model where health care providers are reimbursed for each service performed. The model, however, has been criticized for incentivizing physicians to provide more services rather than better patient care.

The system determines the reimbursement rates for about 9,800 medical services categorized into six types: medical care, surgery, treatment, specimen collection, medical imaging and functional assessment. Compensation for surgery, treatment and medical care are the lowest.

"To address the problem, we will increase compensation levels for medical services with low reimbursement and lower compensation for those with high reimbursement," Jeong said. She added that the medical reform committee has determined six services that need a boost in financial compensation: treatments for severe medical conditions, essential medical services, emergency care, night and holiday shifts, pediatric and obstetric, and health care services in underserved regions.

In addition, the committee is considering overhauling the resource-based relative value scale and conversion factor to address the imbalance in the current fee-for-service system. The conversion factor translates the value of health care services into actual payment amounts, while the relative value scale represents a combination of a physician work component, a practice expense factor and a malpractice expense relative value.

"Making changes to the system will help rectify the distorted structure model for compensation that has persisted for a long time," she explained without explaining further.

As part of its efforts to target the issue of overtreatment, the government also aims to roll out a scheme that prevents non-covered services from being given at the same time as services covered by insurance. This will apply to medical services such as manual therapy and nasal valve reconstruction.

"To achieve a successful medical reform, the public needs to change their current practices in using medical services. ... We would like to ask those with mild symptoms or illness to yield using tertiary and general hospitals to the severely ill and patients needing immediate care," Jeong said.

By Park Jun-hee(junheee@heraldcorp.com)