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Lessons for South Africa from Korea

Lessons for South Africa from Korea. International conference on National Health Insurance 7 th December 2011 Ankit Kumar OECD Health Division ankit.kumar@oecd.org. Why the OECD and South Korea?. South Korea a member of the OECD since 1996 OECD work on health in South Korea:

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Lessons for South Africa from Korea

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  1. Lessons for South Africa from Korea International conference on National Health Insurance 7th December 2011 Ankit Kumar OECD Health Division ankit.kumar@oecd.org

  2. Why the OECD and South Korea? • South Korea a member of the OECD since 1996 • OECD work on health in South Korea: • Health System Review (2003) • Revisiting the Review (2008) • Making Reform Happen (2010) • Review on the Quality of Care (to be published early 2012)

  3. Starting points • Korea’s starting point was very different to South Africa today: • A poor, agrarian economy • Little medical workforce, little health infrastructure • History of chaebols driving industrial development - health insurance a labour benefit • Drive to expand insurance coverage part of the State’s efforts for the industrial development of a health sector • A public funder of a privately provided system

  4. Remarkable economic and social development Source: World Bank, 2011

  5. Achieving universal coverage Share of total health expenditure / coverage

  6. Integration to a single insurer helped improve equity

  7. Achieving universal coverage Share of total health expenditure / coverage

  8. Integration to a single insurer helped improve equity Change in out-of-pocket spending as a share of current expenditure on health, 2000-09 (or nearest)

  9. South Korea’s health system today • National Health Insurance underpins universal coverage • Compulsary wage based contributions • Medical Aid scheme for the poor • Fee for service payments to almost all health care service providers • Overwhelmingly private provision of health care services

  10. Is South Korea equipped for tomorrow? Health expenditure per capita across OECD countries and growth in per capita health expenditure (2002 – 2009) Growth in per capita health expenditure Health spending per capita (PPP) – 2010 (or earliest available)

  11. Hospitals are driving spending… Major contributors to growth in health spending per capita (2004 – 2009)

  12. …and so are chronic diseases Proportion of overall NHI medical expenses by chronic disease by category Source: Lee, S. and Yun, K. (2009), “Policy Recommendations for the Advancement of Health Care”, Korea Institute for Health and Social Affairs Working Paper 2009-03

  13. The wish list of a Korean health policy maker? • Better payment mechanisms • DRGs and prospective payments • Different payment mechanisms for primary care • Stronger gatekeeping • A wider benefit basket… • …coupled with greater regulation of new technologies • A stronger public sector?

  14. Lessons for South Africa • A single insurer is good start, but active purchasing is needed • Containing hospital prices and volumes is critical • Investing in primary care to reduce avoidable admissions • Insurance institutions are often more concerned with financial management – need a ‘policy-savvy’ insurer • If you don’t invest for a strong primary care system, it may never arrive • The insurer (or government) needs to be able to flexibly invest in the institutional development of primary care • Managing AIDS and NCDs demands support for community based chronic disease management

  15. Tackling SA’s challenges: an OECD perspective • Cost effectiveness will be key • Entrench hospital price controls early • Channel volume expansion towards basic primary care for the under-served • A single NHI will need to be nimble in purchasing across public and private • Careful contracting with private hospitals sector, coupled with strong controls on technologies • Performance based payments can encourage things that might otherwise not be done • Hold district authorities to account! • Put the ‘force’ back into workforce

  16. Lessons for South Africa from Korea International conference on National Health Insurance 7th December 2011 Ankit Kumar OECD Health Division ankit.kumar@oecd.org

  17. Out of pocket costs remain relatively high

  18. …they are dominating health service delivery… Hospitals per million persons, 2000 - 2009

  19. …and driving intensity and volumes Average length of stay in hospital for all causes, 2000 and 2009 (or nearest year)

  20. Obesity Women Men % of adult population overweight % of adult population overweight

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