Health Care Spending Increases and Value in South Korea

Health care spending in South Korea (hereafter Korea) nearly doubled from 2010 to 2019. However, little is known about the drivers and effectiveness of these spending increases in terms of changes in disability-adjusted life-years (DALYs).

To evaluate the factors contributing to changes in health care spending and DALYs and estimate the value of health care spending from 2010 to 2019 in Korea.

This cross-sectional study of the population of Korea used 2010 and 2019 data from the National Health Insurance Service for health care spending, and from the Global Burden of Disease 2019 for DALYs. Changes from 2010 to 2019 were decomposed into changes in several factors, including population size, aging, and per-person measures of spending or DALYs. Data analyses were performed from April 2023 to June 2024.

Health care spending was calculated as the total expenditure on medical and long-term care, and health gains were measured as DALYs averted. The value of health care spending was estimated as the ratio of changes in spending per person to changes in DALYs per person.

Total health care spending in Korea increased from $55.0 billion in 2010 to $92.0 billion in 2019. Increases in spending per person accounted for 52.9% of the increase, followed by population aging and population size (35.6% and 11.4%). Total DALYs increased from 11.4 million to 12.2 million. Population aging accounted for 269.4% of the increase, followed by population growth (64.0%). However, DALYs per person decreased (-233.4%), reflecting a lower per capita health burden given the country's age structure. Assuming 50% and 80% of these health improvements could be attributed to health care spending, the estimated spending per DALY averted was $20 678 and $12 924, respectively. The estimate was slightly larger when excluding DALYs not directly impacted by medical care ($23 687). Korea's spending per DALY averted is at the lower range of estimates and comparable to that of other high-income countries.

This cross-sectional study indicates that increased spending per person, which accounted for half of the total health care spending increase, was associated with improved overall health, evidenced by substantially fewer DALYs. These findings contribute to understanding and evaluating the value of health care spending in Korea.