Impact of the reform for separation between prescribing and dispensing of drugs upon financial situation of the National Health Insurance

Korean health care system introduced the reform for separation between prescribing and dispensing of drugs (SPD reform) in the latter part of the year 2000. The objective of this paper is to look at what change this reform has brought about in the financial situation of Korean public health insurance scheme, particularly in terms of insurance benefit outlay. Since the inception of the reform is a development of more than five years ago, its impact on the finance situation would now start to become apparent. Hypothesis is set in this study for each of three components of drug reimbursement in health insurance, i.e. average price level, composition of drugs and their overall volume. In terms of the classification of health care services by mode of production, the impact of the SPD reform is confined mainly to the last two among three drug reimbursement fields including inpatient department, out-patient department and pharmacy. Pure impact of the SPD reform was estimated to be more or less than 1.7 trillion won, 13.1% of the total outlay of the Nation Health Insurance in 2001, and more than 2.0 trillion won, 14.9% of the total outlay of the Nation Health Insurance in 2003. Both dispensing fees for the pharmacists, which had been newly introduced on occasion of the SPD reform, and larger share of expensive drugs in the medicines prescribed by doctors were confirmed to be main drivers of the augmentation of drug reimbursement.

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