Reviewing Efficiency Strategy of Long-term Care System

Abstract

Several common issues are encountered by countries - Germany, Japan, and the United States - that adopted long-term care (LTC) system. First, the demand for LTC and its associated costs have steeply risen following the implementation of the LTC policy. Second, ensuring the quality of services have been difficult. Third, the coordination of services among providers and between LTC and medical care has been inadequate. Learning from their experience, we suggest ways to improve the LTC system in Korea. The basic approach aims for efficiency over equity in the system. This would require promoting provider competition and consumer choice. We propose several policy options according to the major stakeholders. For consumers, cash benefits at fixed rates and personal savings accounts are feasible options to self-contain the demand and cost of services. On the insurer’s side, creating an environment of multiple insurers will engender competition, leading to cost savings and quality care. For providers, delivery of quality services through competition, cost-containment through capitated reimbursements, and coordination of services through integrated delivery system can be achieved. From the assessors’ perspective, establishing an information system to monitor the activities of insurers and providers would be important, empowering consumers with information to choose cost-effective service providers. In summary, the suggested approach would provide cost-effective LTC services by guaranteeing consumer choice and promoting major stakeholder accountability. Further studies are needed to test the feasibility of this model in ensuring quality LTC in Korea.