Financial Integration Scenario for Community Integrated Care: Focusing on the Case of Korea

This study analyzes the potential effects of a reform based on community integrated care in Korea, which is experiencing a high rate of population aging, and a specific method for financial integration. We first analyze the size and trend of funds used for the care for the elderly out of Korea’s health insurance, long-term care insurance, and national budget. We then analyze the amount of financial resources required and the cost-saving effect when the related financial resources are converted into local community care funds. This approach sheds light on the possibility of harmonizing healthcare policy for the elderly and integrated care under the existing insurance system and suggests a direction for reform in policies pertaining to healthcare for the elderly. Given that the same services are provided, we find that combining the finances from the insurance and the national budget would result in a fund of KRW 2.6 trillion to KRW 4.7 trillion. This approach also confirms that health care costs for the elderly can be reduced by 1-5% in the long term, which we estimate to be between KRW 1 trillion to KRW 4 trillion by 2050. We find that by tapping into the national budget to manage the pre-medical stage care, we can utilize an efficient operation mechanism unlike insurance. We also confirm that information exchange and harmonious operation between the national budget and state-run insurance as well as feedback and incentives through performance management are necessary for these results to become a reality.