Funding Local Public Hospitals in Korea

Abstract

This study aimed to propose reimbursement schemes and financial support plans to provide local public hospitals with sufficient compensation for appropriate delivery of health care services and population health projects so that they can fulfill their missions as local public hospitals. We examined economic theories to seek optimal ways to reimburse local public hospitals and why financial supports are necessary for them to provide essential health care services to address needs in communities. We also reviewed reimbursement and funding methods for public hospitals of OECD countries, and implementation of global budget payments for hospitals in Maryland and Pennsylvania. We investigated major roles, current status, and characteristics of local public hospitals as well as the reimbursement and financial support system for public hospitals in Korea, Our suggestions to improve reimbursement and financial support system for public hospitals in Korea include 1) developing and implementing customized models not only to cope with needs in communities but also to consider the current status and characteristics of local public hospitals, 2) securing sufficient compensation for essential healthcare services as well as population health projects, 3) expanding financial support to fund operating costs and labor costs for local public hospitals.