Effects of national health benefits expansion policy on out-of-pocket payments and utilization of patients with four major catastrophic diseases

Background: As South Korea achieved universal health care (UHC) in 1989, patients' access to low-cost health services has highly increased. However, as liability for high-cost procedures is still high, patients' accessibility to high-cost services is has been limited. For this reason, the Korean government has implemented an initiative of the "Mid-term Health Benefits Security Plan" to expand the health benefits coverage since 2005. Nevertheless, it has been criticized as the policy has yet to show any transparent evidence of reducing patients' out-of-pocket costs since its implementation. This study aims to identify if the benefit expansion policy affected a reduction of patients' health care spending and utilization after policy implementation.

Methods: We analyze data from the Korean Health Panel Survey for years 2009-2016, a nationally representative survey of non-institutionalized Korean citizens that provide the most comprehensive information on health care utilization and costs. We utilize two-part difference-in-differences (DID) models to estimate the patients' probability of accessing any care and the intensity of care, health care spending and utilization, conditional on the initiated care.

Results: The total out-of-pocket(OOP) payments and inpatient spending decreased by USD 175.33 (p = 0.033) and USD 358.86 (p =0.018), respectively, which were statistically significant. Outpatient spending increased by USD 57.43 (p =0.607), but it was not statistically significantly associated with the policy implementation. In utilization, there were no significant changes in either the number of visits or hospital stays.

Conclusions: Even though we found that the policy led to a reduction in patients' OOP spending, the effects of the policy were largely limited to inpatient services and patients with high incomes. As the limited benefits of the policy to the particular services and patients might raise some equity issues, the government needs to extend the range of coverage more broadly so that a more comprehensive population can benefit from the policy.