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KMID : 0857920230260010047
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Yonsei Journal of Medical History
2023 Volume.26 No. 1 p.47 ~ p.86
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The Introduction of Public Loans in the Healthcare Sector and the Formation of the System in Korea, 1969?1992
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Hong Chang-Hee
Park Seung-Mann
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Abstract
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The role of loans in Korea’s economic development was significant, and also applied to the healthcare sector. However, despite its importance, there is a lack of research on the subject. In this research landscape, this article examines the background, scale, and impact of the introduction of public loans in the field of healthcare from 1969 to 1992.
Firstly, the introduction of public loans was intertwined with changes in the South Korean government’s social development policies. Since the early 1960s, the South Korean government had promised social development; however, due to a lack of policy determination and inadequate financial resources, it failed to adequately prioritize welfare policies, including in the healthcare sector. This situation underwent a significant change from the mid-1970s. As demands for welfare intensified, the government could no longer postpone social development. Consequently, the medical field was also included in the social development, leading to the introduction of healthcare insurance. A problem, however, lay in the shortage of medical supplies. As healthcare insurance had the potential to generate an increased demand for medical services, it was necessary to allocate hospitals strategically at appropriate locations and expand the number of hospital beds and the amount of medical equipment.
In this situation, the government chose the most familiar approach, the introduction of public loans, to address two main challenges: achieving the balanced distribution of healthcare resources and modernizing the healthcare facilities. At that time, the government aimed to expand the equipment and number of hospital beds in public institutions while simultaneously relying on the private sector for the increased supply of beds in medically underserved areas. This approach aimed to maintain a certain level of functionality in public hospitals while shifting the financial burden of the loans to the private sector as far as possible.
The introduction of loans initially seemed to have achieved success. Firstly, with the modernization of the healthcare facilities, various experiments, tests, and treatments that had previously not been possible became available. Additionally, there was a rapid increase in the number of hospital beds. The increase in the number of healthcare institutions and hospital beds in rural areas, as well as in urban centers, indicated that the objective of achieving a balanced distribution of healthcare resources had to some extent been realized. However, there were also significant side effects. The loans contributed to the consolidation of characteristics that are distinct in modern healthcare in South Korea, namely a vulnerable public healthcare counterbalanced by strong private healthcare. Furthermore, they stimulated the trend of hospital enlargement and competition for equipment, which persists today.
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KEYWORD
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public loans, social development, balanced distribution of healthcare resources, modernization of healthcare facilities
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