Examining the Surge in Korean Herbal Medicine Claims in Auto Insurance
The recent increase in claims for Korean Herbal Medicine (KHM) under auto insurance in South Korea prompts an examination of the factors behind this trend. Utilizing secondary data from the Korea Health Panel (KHP), the study investigates whether this rise stems from clinical necessity or is driven by structural incentives specific to healthcare providers.
The analysis highlights a noticeable utilization gap between Conventional Medicine (CM) and KHM. Employing a decomposition method by Chernozhukov et al., the research explores differences across distributions of medical visits and lengths of stay, considering patient characteristics and provider-side factors. Findings suggest that the higher utilization of KHM largely results from provider-side incentives rather than patient needs, particularly in higher deciles of outpatient visits.
Korean Herbal Medicine services have seen their claim percentage rise from 23% in 2015 to 43.2% in 2019, indicating a more aggressive expansion compared to conventional medical services. This increase is partly due to the undefined nature of auto insurance fee schedules for services not covered by the national insurance system, allowing providers flexibility in their operations under auto insurance.
The study posits that KHM practitioners might engage in more demand-inducing behavior than conventional doctors, facilitated by their operation within less clearly defined regulatory frameworks. This assumption is supported by larger structural differences observed at high quantiles of medical use, suggesting that KHM practitioners respond significantly to supply-side incentives compared to CM counterparts.
These findings recommend reevaluating reimbursement structures within auto insurance healthcare policies to align with actual patient needs and curb potential overutilization driven by provider-side incentives. Such policy interventions could address the broader implications of differences in treatment strategies between KHM and CM providers, aiming for more efficient healthcare delivery under auto insurance schemes.
This study serves as an observational analysis and advocates for future research incorporating direct clinical severity measures to better discern necessary medical intervention from provider-induced demand. Further exploration could offer insights into how regulatory environments influence provider behavior and healthcare costs, particularly in the context of auto insurance.