Poorer Health, Smaller Gains
Between 2010 and 2019, per capita health care spending in Korea increased from $1,211 to $1,903, growing nearly 6 percent annually. During that decade, life expectancy climbed from 80.5 to 83.7 years, while disability-adjusted life years – expressed as the number of years lost due to ill-health – declined significantly. These measures seemingly suggest health spending has yielded solid returns in terms of improved health outcomes.
Yet stark income inequality persists in Korea. The country has both the highest old-age poverty rate and the largest share of out-of-pocket medical expenses among OECD countries. Does rising health spending benefit all segments of society equally?
To answer this question, the researchers analyzed trends in health spending and outcomes across income quintiles (excluding the bottom 10 percent of the household income distribution) from 2010 to 2018.
They measured health care spending as total medical expenditures, including costs for inpatient and outpatient services, emergency services, and prescription medications. All spending measures were adjusted for inflation and are reported in 2021 US dollars. To asses health outcomes, they used three indicators: (1) health-related quality of life, which relies on standard questionnaires to measure individuals’ perceived physical and mental health over time; (2) life expectancy, calculated using life table methods based on enrollment data from the national health insurance system; and (3) quality-adjusted life expectancy (QALE) at age 25, a measure that reflects both longevity and the quality of life during those years – an essential consideration when evaluating the effectiveness and equity of health care systems. To quantify the value of health care across income groups, the researchers applied statistical methods.
They found that adults in the lowest-income quintile experienced the smallest relative improvement in QALE over time: an increase of 0.7 years, compared with 1.4 years in the second and third quintiles, 1.3 years in the fourth, and 1.2 years in the highest quintile. Translated into a value estimate, adults in the lowest income quintile incurred $78,209 per QALE; in contrast, adults in the second through highest income quintiles achieved greater value estimates of $47,831, $46,905, $31,757, and $53,889, respectively. Thus, the most efficient gains in both longevity and quality of life were in the middle-income groups.
“We found that per capita spending was similar across income groups, but the lowest-income quintile experienced much smaller gains in QALE,” Eggleston and her collaborators write.
Reflecting the principle of diminishing returns, “these findings highlight structural inequities in the South Korean health system and emphasize the need for targeted policies to promote equitable health care value.”