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The Changing Process and Politics of Health Policy in Korea

Michael R. Reich
Harvard University

Korea recently 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. This essay compares the three reforms in Korea and draws important lessons about the country's changing process and politics of health care policy. The change of government, the president's keen interest in health policy, and democratization in the 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. The three reforms also showed important differences in the role of interest groups. 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 infl uenced the content of the reform during implementation. Physician strikes also helped 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.

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