The Equity of Health Care Spending in South Korea: Testing the Impact of Publicness

This paper examined the important organizational and managerial factors of publicness for the equity of health care. The extent of organizational publicness was measured with key independent variables such as ownership, evaluation, and accreditation. The dependent variable was measured by three equity indicators for patients under medical care and veterans care: financial inequity, social equity, and overall equity. We analyzed unbalanced panel data with 328 general hospitals between 2008 and 2012. We performed panel analysis with fixed and random effects. Our findings illustrate that government ownership is significantly associated with differences in equity indicators. Government owned hospitals show the better performance for equity than nonprofit and individually owned hospitals do. Compared to nonprofit and individually owned hospitals, government owned hospitals have a higher share of medical payment bills and health care spending for the disadvantaged but a lower proportion of out-of-pocket payment. Government evaluation is also significantly related to better equity performance. There are, however, significantly negative interactions between hospital government ownership and the size of medical payment bills. We found a significant tendency that the more medical payments, the less responsiveness to the equity of health care in government owned hospitals. Future research in hospital performance is required to consider not only sectoral differences but also the negative proclivity of public hospitals that shrink health care services for the poor. Further research is also expected to explore what sectoral identities and behaviors across public, nonprofit, and private hospitals influence the level of equity or inequity in health care.