Journal of the Formosan Medical Association
Volume 108, Issue 12 , Pages 912-920, December 2009

Effects of Supplementary Private Health Insurance on Physician Visits in Korea

  • Sungwook Kang

      Affiliations

    • Department of Public Health, Daegu Haany University, Gyeongsan, Gyeongbuk, Korea
    • ,
  • Chang Hoon You

      Affiliations

    • College of Business, Yonsei University, Korea
    • ,
  • Young Dae Kwon

      Affiliations

    • College of Medicine, The Catholic University of Korea, Seoul, Korea
    • Corresponding Author InformationCorrespondence to: Dr Young Dae Kwon, Department of Medical Humanities and Social Sciences, College of Medicine, The Catholic University of Korea, 505 Banpo-dong, Seacho-gu, Seoul 137–701, Korea
    • ,
  • Eun-Hwan Oh

      Affiliations

    • Department of Health Management, Hyupsung University, Hwaseong, Gyeonggi, Korea

Received 6 March 2009; received in revised form 19 June 2009; accepted 1 July 2009.

Article Outline

Background/Purpose

The coverage of social health insurance has remained limited, despite it being compulsory in Korea. Accordingly, Koreans have come to rely upon supplementary private health insurance (PHI) to cover their medical costs. We examined the effects of supplementary PHI on physician visits in Korea.

Methods

This study used individual data from 11,043 respondents who participated in the Korean Labor and Income Panel Survey in 2001. We conducted a single probit model to identify the relationship between PHI and physician visits, with adjustment for the following covariates: demographic characteristics, socioeconomic status, health status, and health-related behavior. Finally, we performed a bivariate probit model to examine the true effect of PHI on physician visits, with adjustment for the above covariates plus unobservable covariates that might affect not only physician visit, but also the purchase of PHI.

Results

We found that about 38% of all respondents had one or more private health plans. Forty-five percent of all respondents visited one or more physicians, and 49% of those who were privately insured had physician visits compared with 42% of the uninsured. The single probit model showed that those with PHI were about 14 percentage points more likely to visit physicians than those who do not have PHI. However, this distinction disappears in the bivariate probit model. This result might have been a consequence of the nature of private health plans in Korea. Private insurance companies pay a fixed amount directly to their enrollees in case of illness/injury, and the individuals are responsible subsequently for purchasing their own healthcare services.

Conclusion

This study demonstrated the potential of Korean PHI to address the problem of moral hazard. These results serve as a reference for policy makers when considering how to finance healthcare services, as well as to contain healthcare expenditure.

Key Words:  private health insurance , health services utilization , Korea

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PII: S0929-6646(10)60003-4

doi:10.1016/S0929-6646(10)60003-4

Journal of the Formosan Medical Association
Volume 108, Issue 12 , Pages 912-920, December 2009

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