National health insurance system and economic development strategy on the Republic of Korea

Abstract

Health closely affects the economic and social development of a country. The health insurance system is the driving force behind economic growth by guaranteeing the people’s basic rights (health) and improving labor productivity. From the perspective that health is related to a country's economic growth, the purpose of this study is to analyze and draw implications through the case of Korea, where a health insurance system was established within 12 years, the fastest in the world, and industrialization took place within 19 years. For this purpose, using concept of the narrow corridor (Acemoglu & Robinson, 2019), this paper first analyzes how economic and social development impact to country and society’s walking on the equilibrium path. Secondly, in terms of economic development, health is analyzed as an important factor in improving labor productivity in the industrialization strategy (export-led industrialization policy) of the 1970s when health insurance was implemented. Furthermore, we examine the process of the health insurance system as having a backward effect on development of the healthcare industry. Lastly, the economic and social development of a country examines through its connection with the health insurance system by way of the formation of stable industrial relations and strong income redistribution effects in the case of the Factory Saemaul-Movement. Through these approaches, this paper attempts to examine the main socio-economic issues facing the health insurance system in an era of an aging society and digital transformation and consider its social implications.