The government will form a consultative body involving property and casualty insurers and oriental medicine hospitals, as disputes continue over what insurers call excessive treatment at some hospitals, including diagnoses of concussion. The panel will set standards for treating auto accident injuries and draw up rules for resolving disputes.
The Ministry of Health and Welfare plans to launch the body soon with the Ministry of Land, Infrastructure and Transport and the insurance and oriental medicine industries, according to the office of Rep. Baek Jong-heon of the People Power Party, a member of the National Assembly's Health and Welfare Committee, on the 18th. The General Insurance Association of Korea, major property and casualty insurers, the Association of Korean Medicine and the Korean Medicine Hospital Association are expected to take part, with the panel tasked with setting appropriate standards for oriental medicine treatment and establishing principles for settling disputes.
The government is stepping in because conflict between the two industries over auto insurance claims has intensified. Payments for oriental medicine treatment of bodily injury reached 630.7 billion won last year, 5.1 times the 124.7 billion won paid in 2015. Oriental medicine's share of total bodily injury treatment payments also rose to 89.1% last year from 64.4% in 2015.
As a result, the auto insurance business swung to a loss of 184.8 billion won in the first half of this year, down 215 billion won from a year earlier. The number of auto accidents fell about 4.5% from a year earlier, yet the loss ratio climbed 1.6 percentage points over the same period to 84.9%. An official at a property and casualty insurer said excessive oriental medicine treatment is the main culprit behind the deteriorating loss ratio.
The government plans to act as a mediator in setting appropriate treatment standards and principles for handling disputes, as leakage of insurance payouts from excessive treatment ultimately drives up premiums. An official at the Ministry of Health and Welfare said the ministry will discuss operating a consultative body with related agencies and organizations to protect the right of traffic accident patients to receive treatment and to ensure appropriate medical services.
Insurers hope the move will help eliminate moral hazard and correct practices in filing claims. An official at a property and casualty insurer said the attempt by the two industries to meet and set standards is welcome, but added that the key question is whether the oriental medicine hospitals will abide by any agreement. (See pages 1 and 2 of this newspaper's Sept. 15 edition.)