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KMID : 1124020190350010103
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Korean Social Security Studies
2019 Volume.35 No. 1 p.103 ~ p.128
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A Study on the Marketization of Providers of The National Long - Term Care Insurance: Focusing upon the Effects on Cost and Service Quality
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Yi Gi-Joo
Seok Jae-Eun
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Abstract
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It has been universally observed that as a means of reconstruction, so-called welfare states have increasingly adopted marketization reforms in order to elevate service quality and reduce service cost by increasing competition among providers and thereby strengthening consumers' rights. Like many other countries, South Korea has been rapidly expanding the infrastructure of national long-term care insurance by adopting marketization principles. However, contrary to expectations, excessive competition among providers has shifted providers' concerns exclusively to survival within the market. Conflicting with the assumptions of marketization supporters, lower service quality was a foreseeable outcome of this trend. In the current paper, the author contends that most previous studies on national long-term care insurance in South Korea have been limited to an examination of differences among providers, mostly public versus private, and that a more comprehensive approach is needed to properly understand the nature of marketization and its effects upon this particular insurance market in South Korea. This study empirically investigates the potential influence of increasing competition among long-term care insurance providers on service quality and cost. The major findings are as follows. First and foremost, regional data analysis showed that the level of competition among providers tended to be negatively correlated with the level of service quality. Second, service costs tended to increase in regions with higher competition. These findings clearly show that marketization failed to achieve its designed goals, namely, to elevate service quality and reduce service cost. The author believes that these findings are clear evidence of the need for an alternative approach to long-term care insurance services in South Korea. Finally, the author hopes that this study will help demonstrate the unique nature of the long-term care insurance market in South Korea and lead to more comprehensive analyses of this topic.
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KEYWORD
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Long-term care, Marketisation, Service quality, Hirschman-Herfindahl, Spatial Regression
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