J Korean Med Assoc.  2017 Jan;60(1):63-71. 10.5124/jkma.2017.60.1.63.

Securing patient access to new medical technology under the diagnosis-related group system in South Korea: a review of foreign policies and selective reimbursement coverage programs for 4 major conditions

• Hwang H
• Lee SS
• Lee SH

• KMID: 2367731
• DOI: http://doi.org/10.5124/jkma.2017.60.1.63

Abstract

The Korean government operates a fee-for-service system, as well as a diagnosis-related group (DRG) payment system that only applies to 7 different specific disease groups. To control rapidly increasing health expenditures, the Korean government adopted a compulsory DRG payment system for 7 disease groups in 2013. However, the current Korean DRG (K-DRG) system does not address the cost of new medical technologies and accompanying services, whereas the United States and European countries have implemented incentive systems within the DRG payment system to promote technological innovations. The Korean government is expanding the accessibility of new medical technologies to strengthen the coverage of 4 major conditions with a selective reimbursement system, but the K-DRG system is inconsistent with the selective reimbursement system in terms of adopting new medical technology. Such inconsistency is clearly shown in the case of advanced energy devices that are essential for surgical procedures. Despite their clinical usefulness and the high demand for such instruments, there is little space for compensation for advanced energy devices in DRG groups. Neither healthcare providers nor patients can choose selectively reimbursed medical devices under the current DRG system, leading to unequal healthcare benefits among patient groups. This paper proposes additional payments for new medical technology that is costly but clinically effective to ensure patient access to new medical technology under the K-DRG system, and suggests that a fair and consistent policy would be to apply the selective reimbursement of medical services in K-DRG.

Keyword

Diagnosis-related groups; New medical technology; Selective reimbursement coverage

MeSH Terms

Compensation and Redress
Delivery of Health Care
Diagnosis-Related Groups*
Health Expenditures
Health Personnel
Humans
Inventions
Korea*
Motivation
United States

Reference

1. Ministry of Health and Welfare. Notification no. 2012-62 of the Ministry of Health and Welfare: amendment of health insurance reimbursement, non-reimbursement list of medical procedures and relative value of reimbursement [Internet]. Seoul: Ministry of Health and Welfare;2012. cited 2015 Dec 4. Available from: http://www.mohw.go.kr/front_new/al/sal0301ls.jsp?PAR_MENU_ID=04&MENU_ID=0403.

2. Ministry of Health and Welfare. Extended application of 7 diseases DRG to the tertiary hospitals [Internet]. Seoul: Ministry of Health and Welfare;2012. cited 2015 Dec 4. Available from: http://www.mohw.go.kr/front_new/al/sal0301ls.jsp?PAR_MENU_ID=04&MENU_ID=0403.

3. Ministry of Health and Welfare. Implementation of new DRG pilot project [Internet]. Seoul: Ministry of Health and Welfare;2009. cited 2015 Dec 4. Available from: http://www.mohw.go.kr/front_new/al/sal0301ls.jsp?PAR_MENU_ID=04&MENU_ID=0403.

4. Health Insurance Review and Assessment Service. Guidelines for new DRG pilot project [Internet]. Seoul: Health Insurance Review and Assessment Service;2016. cited 2016 Oct 27. Available from: http://biz.hira.or.kr/index.jsp.

5. Kim Y. Towards universal coverage: an evaluation of the benefit enhancement plan for four major conditions in Korean National Health Insurance. J Korean Med Assoc. 2014; 57:198–203.

6. Ji YG. The reform of health insurance policy. J Korean Med Assoc. 2012; 55:978–986.

7. Choi J. Perspectives on cost containment and quality of health care in the DRG payment system of Korea. J Korean Med Assoc. 2012; 55:706–709.

8. Centers for Medicare & Medicaid Service. Innovators' guide to navigating medicare: version 3 [Internet]. Baltimore: Centers for Medicare & Medicaid Services;2015. cited 2015 Dec 1. Available from: https://www.cms.gov/Medicare/Coverage/CouncilonTechInnov/Downloads/Innovators-Guide-Master-7-23-15.pdf.

9. Quentin W, Scheller-Kreinsen D, Blumel M, Geissler A, Busse R. Hospital payment based on diagnosis-related groups differs in Europe and holds lessons for the United States. Health Aff (Millwood). 2013; 32:713–723.

10. Busse R, Geissler A, Quentin W. World Health Organization. Diagnosis-related groups in Europe: moving towards transparency, efficiency and quality in hospitals. Maidenhead: Open University Press;2011.

11. Martelli N, van den Brink H. Special funding schemes for innovative medical devices in French hospitals: the pros and cons of two different approaches. Health Policy. 2014; 117:1–5.

12. Cavalieri M, Gitto L, Guccio C. Reimbursement systems and quality of hospital care: an empirical analysis for Italy. Health Policy. 2013; 111:273–289.

13. National Health Insurance Administration. Tw-DRG add new features category of special materials response program under Schedule 7.4-DRG payment system [Internet]. Taipei: National Health Insurance Administration;2014. cited 2016 Jan 28. Available from: http://www.nhi.gov.tw/Search_result.aspx?q=%E5%80%8B%E6%A1%88DRG%E6%94%AF%E4%BB%98%E9%BB%9E%E6%95%B8%E4%B9%8B%E8%A8%88%E7%AE%97%E6%96%B9%E5%BC%8F.

14. Bureau of National Health Insurance. National Health Insurance in Taiwan 2011 annual report [Internet]. Taipei: Bureau of National Health Insurance;2014. cited 2016 Jan 28. Available from: https://www.nhi.gov.tw/Resource/webdata/20774_1_NHI%20IN%20TAIWAN%202011%20ANNUAL%20REPORT.pdf.

15. Sorenson C, Drummond M, Burns LR. Evolving reimbursement and pricing policies for devices in Europe and the United States should encourage greater value. Health Aff (Millwood). 2013; 32:788–796.

16. Hutton J, Trueman P, Henshall C. Coverage with evidence development: an examination of conceptual and policy issues. Int J Technol Assess Health Care. 2007; 23:425–432.

17. Scheller-Kreinsen D, Quentin W, Busse R. DRG-based hospital payment systems and technological innovation in 12 European countries. Value Health. 2011; 14:1166–1172.

18. Ministry of Health and Welfare. The reimbursement expansion for 3 procedures (insertion of voice prosthesis etc.) [Internet]. Sejong: Ministry of Health and Welfare;2014. cited 2016 Mar 21. Available from: http://www.mohw.go.kr/front_new/al/sal0301ls.jsp?PAR_MENU_ID=04&MENU_ID=0403.

19. Ministry of Health and Welfare. Notification no. 2015-198 of the Ministry of Health and Welfare: the amendment of decision criteria for items applying different copayment rate within the range of 100 percents [Internet]. Sejong: Ministry of Health and Welfare;2015. cited 2016 Mar 21. Available from: http://www.mohw.go.kr/front_new/jb/sjb0406ls.jsp?PAR_MENU_ID=03&MENU_ID=030406.

20. Kim JM. 1 Years after beginning of DRG services system. J Korean Med Assoc. 2013; 56:942–944.

21. Aydin C, Yildiz A, Kasap B, Yetimalar H, Kucuk I, Soylu F. Efficacy of electrosurgical bipolar vessel sealing for abdominal hysterectomy with uterine myomas more than 14 weeks in size: a randomized controlled trial. Gynecol Obstet Invest. 2012; 73:326–329.

22. Rossetti D, Vitale SG, Bogani G, Rapisarda AM, Gulino FA, Frigerio L. Usefulness of vessel-sealing devices for peripartum hysterectomy: a retrospective cohort study. Updates Surg. 2015; 67:301–304.

23. Elhao M, Abdallah K, Serag I, El-Laithy M, Agur W. Efficacy of using electrosurgical bipolar vessel sealing during vaginal hysterectomy in patients with different degrees of operative difficulty: a randomised controlled trial. Eur J Obstet Gynecol Reprod Biol. 2009; 147:86–90.

24. Health Insurance Assessment and Review Service. Advisory conference for the gynecology DRG group [Internet]. Seoul: Health Insurance Review and Assessment Service;2011. cited 2015 Nov 27. Available from: http://ksog.org/bbs/?code=po.

25. Health Insurance Assessment and Review Service. Evaluation results for the propriety of 7 diseases DRG [Internet]. Seoul: Health Insurance Review and Assessment Service;2014. cited 2015 Nov 27. Available from: http://www.hira.or.kr/re/diag/getDiagEvlList.do?pgmid=HIRAA030004000000.

26. Min EG. Obstetrics and gynecology's strategies for DRG [Internet]. Seoul: Korean Society of Obstetrics and Gynecology;2012. cited 2015 Nov 23. Available from: http://www.ksog.org/journal/search.php.

27. Health Insurance Assessment and Review Service. Expansion methods of selective reimbursement coverage for affordable compensation in medical devices [Internet]. Sejong: ALIO;2015. cited 2016 Feb 1. Available from: http://www.alio.go.kr/informationResearchView.do?seq=2076841.

28. Zhou H, Yi W, Zhang J, Wang W, Wang Y, Gao W, Hu Z. Short-and long-term outcomes of LigaSure versus conventional surgery for curative gastric cancer resection: a matched pair analysis. Gastric Cancer. 2015; 18:843–849.

29. Schreyogg J, Baumler M, Busse R. Balancing adoption and affordability of medical devices in Europe. Health Policy. 2009; 92:218–224.

30. The Committee on Ways and Means. the Committee on Energy and Commerce. H.R.5009-ensuring patient access to critical breakthrough products act of 2016 [Internet]. Washington, DC: Congress.gov;2016. cited 2016 Nov 1. Available from: https://www.congress.gov/bill/114th-congress/house-bill/5009?q=%7b%22search%22%3A%5b%22%5C%22hr5009%5C%22%22%5d%7d&resultIndex=1.

31. Busse R, Schreyogg J, Smith PC. Variability in healthcare treatment costs amongst nine EU countries: results from the HealthBASKET project. Health Econ. 2008; 17:1 Suppl. S1–S8.