Health for All in the Republic of Korea

One Country's Experience with Implementing Universal Health Care

Published In: Health Policy, v. 31, no. 1, Jan. 1995, p. 29-42

Posted on on December 31, 1994

by John Peabody, Sung-Woo Lee, Steven Bickel

Reviews the Republic of Korea's experience in implementing universal health insurance and the dilemma of providing such coverage while trying to control spiraling costs. In 1977, Korea adopted a policy designed to achieve universal coverage while maintaining fee-for-service reimbursement. Korea established an employer-based health care system in just twelve years by first mandating coverage for businesses, followed by government employees and teachers. Coverage was later extended to the poor, the self-employed, and residents of rural areas. Independent insurance societies manage each scheme, set premiums and copayments, and are responsible for maintaining financial viability. Health care reform in Korea has been successful in achieving universal coverage, providing for a full range of services, and eliminating adverse selection. The system is financially solvent, costs are equitably distributed, with the government providing subsidies when necessary, and small businesses have not been unduly burdened economically. However, attempts to limit costs have been unsuccessful. The percentage of health care accounted for in the gross national product increased from 3 to 7 percent between 1975 and 1991, and the percent of financing provided by public funds increased from 12 to 30 percent. Patient demand for health care has remained surprisingly resistant to increasing copayments. Providers have responded to lower physician and hospital fees by providing shorter, more frequent patient visits, relabeling services, and increasing hospital admissions. Competition between insurance societies has not materialized in any meaningful way to control costs. The lessons learned from Korea might be relevant to other countries in designing and implementing universal health care systems.

This report is part of the RAND Corporation External publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.

Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.