Today, I went to the hospital to get the stitches from my appendectomy taken out. There were just four of ‘em, so it was fast and easy. Then I found out I was getting billed for it. “Damn,” I thought. “Shouldn’t getting the stitches out have been included in the bill I paid last week?” I also wondered how much it would cost for that few minutes of work. $50? $100? $200? I had insurance through work, but in Korea your insurance only covers 55-70% of any given medical bill.
Turned out the bill was… wait for it… 5,080 won, of which I had to pay 3,000 won. For those of you who’ve never been to Korea, 1,000 won is a little less than a dollar. That’s right, I went in for medical treatment and paid less than $3 US. In a way it makes perfect sense, since the procedure took 5 minutes tops, but familiarity with the American health care system meant the reasonable price took me completely by surprised.
This was after I had gotten surgery and two days in a recovery room for a bill of under 3m won, of which I paid about 40%. On the phone, my parents told me that my bill for an appendectomy would have been about $10,000 dollars in the States. Wondering how the hell Korean prices for health care manage to be so reasonable, I did a Google search and discovered that, yes, in South Korea there are price controls in medicine, which are set by National Health Insurance Corporation.
I admit I was surprised to learn this. Don’t price controls lead to shortages? What I found out is that in Korea, the price controls have some drawbacks, but the drawbacks seem to be pretty mild:
This has real effects on healthcare. Think about it from the doctor’s perspective – if the price is fixed, how can they earn money? Broadly, there are three ways: (1) see more patients; (2) perform treatments that have a higher NHIC price or are not covered by NHIC; (3) find another way to get paid.
Because Korean doctors are incentivized to see more patients, they often cram in as many patients as they can, in a practice derisively called “five-minute diagnosis.” As of 2005, each Korean doctor sees three to four times more outpatients than doctors in other OECD countries. Many Korean patients complain about this practice, as they do not feel adequately cared for.
The above quote is from a Korean, and frankly I don’t think Koreans realize how good they have it. I’d much rather have to make due with a “five-minute diagnosis” (which I guess I went through, but which diagnosed my appendicitis just fine) than to be unable to afford treatment or have my savings wiped out by a hospital bill. Robin Hanson has argued that in the United States, much of our health care costs are due to paying a premium in order to feel like we’re doing something for our health. Having health care heavily regulated discourages that.
Another problem with the Korean health care system:
Because the patients can visit any doctor in the country, they often opt to visit the best doctor in the country for any petty ailment. So the best hospitals in Korea – like Seoul National University Hospital, Yonsei Severance Hospital, National Cancer Center, etc. – often have a significant waiting time not unlike the horror stories one hears about other socialized medicine countries.
I didn’t experience this, because while I was in Seoul when I noticed something was wrong, I made a deliberate decision to go to Inha University Hospital, because it’s closer to where I live and work (the latter is relevant because that made it easier for one of my coworkers to come help me navigate the system; I’ll be eternally grateful to her.) At Inha, I had to wait a couple hours for diagnosis and another couple hours for surgery, and while those were probably some of the least-pleasant hours of my life, in the end it didn’t really make a difference.
So in the end, I had a positive experience with the Korean health care system. Having had appendicitis in the US probably wouldn’t have been a disaster, because thanks to the Affordable Care Act I’m covered under my parents’ insurance for another year. But this experience has made a part of me really, really happy I live in Korea. To all my friends still in the US, here’s hoping the US health care system will one day be as good as Korea’s.