• Health Policy and Management
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• v.9 no.1
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• pp.1-29
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• 1999

The Government has recently planned to improve the medical insurance drug price systems by removing the drug margin occurring from the difference between the official and purchasing prices, and instead by setting prices through adding drug administration casts calculated to the purchasing costs. In the circumstances, the major policy and implementing issues are how to define the drug administrance cost and how to calculate them. This study attempts to provide for the conceptional and operational definitions and thereby develop a costing model for the cost. The relationship between the current systems of medical services costs and prices were reviewed to define the concept of the costs. The study defined the costs from the narrow and wide prospective of meaning, and three operational definitions were provided. The costing model was developed applying the departmental costing principles. Finally, several prerequisites that have to be considered for the implementation of the definition and the model from the practical viewpoint.

• KDI Journal of Economic Policy
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• v.30 no.2
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• pp.99-128
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• 2008

Nearly all Koreans are insured through National Health Insurance(NHI). While NHI coverage is nearly universal, it is not complete. Coverage is largely limited to minimal level of hospital and physician expenses, and copayments are required in each case. As a result, Korea's public insurance system covers roughly 50% of overall individual health expenditures, and the remaining 50% consists of copayments for basic services, spending on services that are either not covered or poorly covered by the public system. In response to these gaps in the public system, 64% of the Korean population has supplemental private health insurance. Expansion of private health insurance raises negative externality issue. Like public financing schemes in other countries, the Korean system imposes cost-sharing on patients as a strategy for controlling utilization. Because most insurance policies reimburse patients for their out-of-pocket payments, supplemental insurance is likely to negate the impact of the policy, raising both total and public sector health spending. So far, most empirical analysis of supplemental health insurance to date has focused on the US Medigap programme. It is found that those with supplements apparently consume more health care. Two reasons for higher health care consumption by those with supplements suggest themselves. One is the moral hazard effect: by eliminating copayments and deductibles, supplements reduce the marginal price of care and induce additional consumption. The other explanation is that supplements are purchased by those who anticipate high health expenditures - adverse effect. The main issue addressed has been the separation of the moral hazard effect from the adverse selection one. The general conclusion is that the evidence on adverse selection based on observable variables is mixed. This article investigates the extent to which private supplementary insurance affect use of health care services by public health insurance enrollees, using Korean administrative data and private supplements related data collected through all relevant private insurance companies. I applied a multivariate two-part model to analyze the effects of various types of supplements on the likelihood and level of public health insurance spending and estimated marginal effects of supplements. Separate models were estimated for inpatients and outpatients in public insurance spending. The first part of the model estimated the likelihood of positive spending using probit regression, and the second part estimated the log of spending for those with positive spending. Use of a detailed information of individuals' public health insurance from administration data and of private insurance status from insurance companies made it possible to control for health status, the types of supplemental insurance owned by theses individuals, and other factors that explain spending variations across supplemental insurance categories in isolating the effects of supplemental insurance. Data from 2004 to 2006 were used, and this study found that private insurance increased the probability of a physician visit by less than 1 percent and a hospital admission by about 1 percent. However, supplemental insurance was not found to be associated with a bigger health care service utilization. Two-part models of health care utilization and expenditures showed that those without supplemental insurance had higher inpatient and outpatient expenditures than those with supplements, even after controlling for observable differences.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.22 no.1
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• pp.131-137
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• 2021

This study estimated acreage response functions for greenhouse paprika, greenhouse strawberry, open-land garlic, and open-land spinach by using Gyeongsangnamdo agricultural income data. The results show that the cultivation area for greenhouse paprika increased because the agricultural management costs decreased, and the risk of price volatility was relatively low. On the other hand, the cultivation area for greenhouse strawberries decreased due to increasing agricultural management costs and the greater risk of price volatility. In the case of open-land garlic and spinach, the cultivation area remained stagnant due to the greater risk of price volatility, despite increasing agricultural revenue. We derived several policy implications from our results. The risk of price volatility in agricultural products is greater for crops grown on land rather than crops grown in greenhouses. Therefore, the local government needs to adopt the "agricultural revenue guarantee insurance" in preference to crops grown on land rather than crops grown in greenhouses. On the other hand, in the case of greenhouse crops, agricultural management costs are very high. Thus, local government should focus on replacing old facilities and supplying smart-farm facilities that reduce agricultural management costs such as heating costs.

• Health Policy and Management
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• v.17 no.2
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• pp.1-17
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• 2007

Limited coverage for health care services of National Health Insurance(NHI) in Korea has been ongoing policy issue but additional NHI financing through raising contribution or taxes in order to improve coverage faces substantial obstacles. Private health insurance(PHI) is often considered as an alternative financing source to improve coverage. Recent reform that attempted to stretch the role of PHI allowed life insurance companies to provide complementary PHI, indemnity plan which will pay for uncovered services by NHI and out-of-pocket spending for covered services. Although complementary PHI may relieve financial burden of patients, it may significantly raise NHI spending as well as total health expenditure since little out-of-pocket spending may increase utilization of health care. So far, there has not been enough discussion about concerns of potential adverse effect resulting from extended role of PHI. This study investigated potential increase of NHI spending followed by extension of complementary PHI through sensitivity analysis. The amount of NHI spending for services that would be covered by complementary PHI was calculated using 2005 NHI statistics and expected complementary PHI enrollment rate by age and sex. Expected utilization increases were obtained based on price elasticities$(-0.2{\sim}-0.5)$ from previous studies and expected coverage rate$(50{\sim}80%)$ of complementary PHI and then converted to monetary figures. Because coverage rate of complementary PHI has not been determined yet, we employed the sensitivity analysis using coverage rate of $50{\sim}80%$. Findings demonstrate that additional spending for health care services is expected to be $426{\sim}1,702$ billion won, corresponding amount payed by NHI $298{\sim}1,192$ billion won. In conclusion, since complementary PHI may raise NHI spending significantly, there should be an agreement whether this additional cost would be accountable and acceptable in our society. Potential inefficiency resulting from extended role of complementary PHI should be considered since public and private financing do not operate in isolation and there should be more discussion on proper role of PHI in Korea.

• Health Policy and Management
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• v.9 no.2
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• pp.118-138
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• 1999

This study presents the variations on drug utilization for outpatients' URI, gastritis. and hypertension by the type of hospital- tertiary hospital. general hospital. hospital. clinic. It investigated drug expenses. daily drug expenses. days of medication. the highest price of the drugs used. and the number of the different drugs used for each disease and type of hospital. This study also performed analysis to see how much the variations of variables related to drug use affect the variations of drug expenses. The dependent variable was drug expenses and the independent variables were days of medication. the average price of the drugs used. and the number of the different drugs used. Analysis of the drug utilization was performed on NFMI(National Federation of Medical Insurance) 1994 medical expense claim data. Patients with secondary diseases were excluded. In this study. 379 patients with URI, 386 patients with gastritis. 1.257 patients with hypertension were included. It was founded that there were large variation on drug utilization between the types of hospital for same diseases. Days of medication were longest in tertiary hospitals and shortest in hospitals or clinics. Clinics showed the lowest daily drug expenses in all of the diseases investigated. Daily drug expenses were highest in general hospitals or hospitals. which also tended to use drugs of higher price than other types of hospital. General hospitals and hospitals had larger variations in daily drug expenses and the highest price of drugs. It suggested that drug might be utilized overly in general hospitals and hospitals and some other factors might influence on drug utilization in these hospitals. It was found that the variations of drug expenses were affected by the variations of drug price and days of medication rather than the number of the different drugs. Then the strategy to reduce the variations of drug utilization and to improve the quality of drug utilization should focus on the drug price and days of medication. Further study is needed to assess the quality as well as the variation of drug utilization and to show the factors which affect them.

• Journal of Korean Academy of Nursing Administration
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• v.7 no.2
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• pp.205-221
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• 2001

It will become more and more popular to use the long-term care facilities and home health care services with the chronic disease increasing. It depends on how much the consumers would pay and purchase the services. They might get more benefits from that kind of services than from ordinary hospitalization. So far, the study of determining the medical service price has focused most often on the efforts from the providers' view. But it must be reasonable to include the consumers' value for the service. This study was performed to assess WTP(Willingness to Pay) for home health care service in order to apply to the determination of nursing price in a reasonable manner. In this study, respondents were asked if they would pay for the service's intangible benefits under the four different types(open-ended minimum WTP, open-ended maximum WTP, bidding WTP, referendum WTP). The contingent valuation method is a potentially useful tool in understanding how people value the benefits of the service. As a result, average open-ended minimum WTP was W16,015 per day among 65 respondents. Average open-ended maximum WTP was W29,154 per day among 65 respondents. Average bidding WTP was W26,300 per day among 65 respondents. Average referendum WTP was W22,200 per day among 70 respondents. The results of regression analyses were also consistent with theoretical prediction, e.g., increasing WTP with consumers' value for the service, state of patients, and household income. This study demonstrated that it was more reasonable to consider the consumers' value in determining the services' price. In addition, a further study is needed to test the validity of this CV method and to determine a proper nursing price based on the consumers' view.

• Proceedings of the Korean Institute of Intelligent Systems Conference
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• 2007.04a
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• pp.209-212
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• 2007

Non-additive measures and their corresponding Choquet integrals are very useful tools which are used in both insurance and financial markets. In both markets, it is important to to update prices to account for additional information. The update price is represented by the Choquet integral with respect to the conditioned non-additive measure. In this paper, we consider a price functional H on interval-valued risks defined by interval-valued Choquet integral with respect to a non-additive measure. In particular, we prove that if an interval-valued pricing functional H satisfies the properties of monotonicity, comonotonic additivity, and continuity, then there exists an two non-additive measures ${\mu}_1,\;{\mu}_2$ such that it is represented by interval-valued choquet integral on interval-valued risks.

• The Korean Journal of Financial Studies
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• v.6 no.1
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• pp.313-334
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• 2000

In this paper, we obtained some supportive evidence for the long-run PPP relationship concerning the Korean Won currency. Previous tests of PPP in the bilateral exchange rates of the Korean Won rate vis-a-vis the U.S. Dollar have been exposed to the lack of power problem. We argue that their failure to find PPP relation in Korean Won rates was due to the low power of Augmented Dickey-Fuller tests or the Engle-Granger two-step tests applied to the Korean exchange rate data with short sample period. En attempting to alleviate this low power problem, we used the error-correction model test and the Johansen test for bilateral long-run equilibrium relationships between exchange rates and price indices from Korea's major trading partners. It is surprising that our evidence supporting for long-run PPP in Korean Won rate contrasts sharply with Bahmani-Oskooee, Moshen and Rhee, Hyun-Jae(1992)'s.

• Health Policy and Management
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• v.3 no.2
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• pp.27-80
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• 1993

It is widely known that patients' utilization pattern for medical care facilities and the patientflow are influenced by multi-factors, such as demographic characteristics, structural characteristics of society, socio-psychological characteristics(value, attitude, norms, culture, health behavior, etc.), economic characteristics(income, medical price, relative price, physician induced demand, etc.), geographical accessibility, systematic characteristics(health care delivery system, payment methods for physician fees, form of health care security, etc.), and characteristics of medical facilities(reliability, quality of medical care, convenience, kindness, tec.). This study was conducted to research the mechanism of patient-flow according to changes of health care system(implementation of national health insurance, health care referral system and regionalization of health care utilization, etc.) and characteristics of medical facilities(ownership of hospital, characteristics of medical services, non-medical characteristics, etc.). In this study, the fact could be ascertained that the patient-flow had been influenced by changes of health care system and characteristics of medical facilities.

• Journal of the Korean Institute of Intelligent Systems
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• v.17 no.4
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• pp.451-454
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• 2007

Non-additive measures and their corresponding Choquet integrals are very useful tools which are used in both insurance and financial markets. In both markets, it is important to update prices to account for additional information. The update price is represented by the Choquet integral with respect to the conditioned non-additive measure. In this paper, we consider a price functional H on interval-valued risks defined by interval-valued Choquet integral with respect to a non-additive measure. In particular, we prove that if an interval-valued pricing functional H satisfies the properties of monotonicity, comonotonic additivity, and continuity, then there exists an two non-additive measures ${\mu}1,\;{\mu}2$ such that it is represented by interval-valued choquet integral on interval-valued risks.