Evaluation of Health Policy Governance in the Introduction of the New DRG-Based Hospital Payment System from Interviews with Policy Elites in South Korea

The study provides evidence of the governance and its context according to the introduction of the New Diagnosis-Related Groups (DRGs)-based payment system in Korea. In-depth interviews with 14 core policy elites from four health areas were conducted. As governance is a multidimensional concept, interviewees were asked to evaluate different dimensions based on the World Bank’s five elements (Coherent decision-making structures, Consistency and Stability, Stakeholder participation, Supervision and Regulation, and Transparency and Information). Overall, the new payment system was perceived as poorly governed. Since its introduction, it has not offered a new governance perspective because it used a conventional top-down approach, while political windows for cooperation were not wide open. Of the five governance dimensions, the scores were lowest in Stakeholder participation. There was a large perception gap between physicians and government officers here. Participants from academia perceived Consistency and Stability as ineffectively governed. In the meantime, the government has mainly created health policy in Korea. As a result, stakeholder participation, especially the participation of medical personnel, has been insufficient in the process of health policy formulation. The study suggests that the decision-making process in health policy needs to be more participatory and reliable, with governance regarded as a high priority.