Why is South Korea handling the pandemic better than Italy?

Author: Matthew Tanous, disinthrallment.com

By now, everyone is painfully familiar with the Covid-19 pandemic that is ravaging the world. Strict travel restrictions are being imposed around the world, people are being tested en masse, everyone is preparing or already imposing serious quarantines, and ordinary people are worried about the security of their jobs and families. Large gatherings are being banned, and in some cases entire countries are being quarantined.

In all this turmoil, however, we are witnessing an almost natural experiment on how effective socialized health systems are in such crisis situations. And the answer seems to be...bad. For demonstration, we can compare the cases of Italy and South Korea. At the time of publication of this material (12.03.2020) in Italy there are 15,113 cases of coronavirus, while South Korea has 7,869. However, the number of infected people in South Korea is growing at a relatively slow rate of about 100 per day, while in Italy in the last day alone the official number of infected people increased by 2,500. Overall, Italy and South Korea have comparable populations (about 60 million and 50 million), although the territory of South Korea is about a third of that of Italy.

The pandemic in Italy is in a phase of rapid exponential growth, despite the entire country being quarantined. On the other hand, South Korea has managed to slow the spread of the virus much better, despite the fact that there was even a cult in the country that deliberately tried to infect as many people as possible. There are many reasons for this difference in results, and some of them are directly related to Italy's much more socialist health system.

Healthcare in South Korea

Although South Korea provides universal health insurance, the state does not set market prices for health services. Prices at hospitals and clinics in the country regularly exceed the level of government insurance, which is why many Koreans also use private insurance to cover the difference. Eight out of ten Koreans use private insurance, paying an average of $120 per month for it.

Hospitals in the country are 94% private, with no government subsidies and follow a fee-for-service model. Many of these hospitals are run by private universities or charitable organizations. The number of private hospitals in the country has increased significantly from 1,185 in 2002 to 3,048 in 2020. As a result, South Korea has 10 hospital beds per 1,000 people, more than double the average among countries in the Organization for Economic Cooperation and Development (OECD). Prices in private hospitals in the country are also significantly lower (between 30% and 85%) than those in the United States, which is more strictly regulated.

Healthcare in Italy

In Italy, on the other hand, hospitalizations and surgeries are provided by public or private hospitals, but are mandatory and free of charge for everyone regardless of income level. The costs are fully covered by the national health insurance. Patients often have to wait months to access procedures in large public hospitals. The wait for small private hospitals is somewhat shorter. Both public and private hospitals offer so-called "market" options, where the patient can choose to cover the costs personally, but this option is rarely used. Emergency medical care is also always free.

The time people in Italy have to wait for healthcare services, as well as other markers of healthcare quality, are significantly worse in the southern regions of the country, as a result of which patients often go to northern Italy in search of better service. Doctors who are educated in Italian medical schools often leave the country to work elsewhere, a problem that Italian authorities are trying to address. Italy suffered from a shortage of medical workers even before the pandemic hit the country. The number of hospitals in the country has been falling steadily over the past few decades, from 1,321 in 2000 to 1,063 in 2017. Italy's public insurance imposes prices for medical services that are below market prices in order to save public funds, leading to a shortage of medical professionals and services, as is logical when imposing practical price controls.

Conclusion

Italy's healthcare system is already overwhelmed by tens of thousands of coronavirus cases. As a result, hospitals in the country are being forced to prioritize care for younger patients, effectively leaving some of those most at risk from the virus (the elderly) to fend for themselves. Most observers believe this is due to the severity of the pandemic itself. However, the facts paint a different picture. They show that the situation is being made worse by an overreliance on a state-guaranteed and centralized healthcare system that does not follow market principles and imposes price controls.

On the other hand, although South Korea provides basic public health insurance, its healthcare system is one of the most market-based in the world, even more market-based than that of the United States (where the supply of healthcare services is constrained by numerous regulations that increase costs and make healthcare less accessible). As a result, the South Korean healthcare system can achieve what the Italian one cannot – effectively deal with the pandemic and bring the spread of the virus under comparative control without the need for a national lockdown.

Did you like it? Take a minute to support the EKIP on Patreon!