Solidarity, labour, and institution: The politics of health insurance reform in Japan and South Korea Seongjo Kim Thesis submitted for the Degree of Doctor of Philosophy School of East Asian Studies University of Sheffield May 2017 ii ABSTRACT Why did South Korea integrate multiple health insurers into a single national health insurance in 2003 while Japan maintained its fragmented insurance system based on labour market status? Why did labour in South Korea support the integra- tion of health insurance schemes whilst labour in Japan was opposed to it? The health insurance systems in Japan and South Korea were both based on the social insurance system and fragmented on the basis of occupation and labour market status. However, these two countries have taken different reform paths. This thesis argues that the two self-undermining effects and ideas were in- terwined and these led to different policy coalitions. Firstly, workers’ support for the consolidation reform was dependent on the inclusivity of the decision-making pro- cess at company-level health insurance schemes. Labour in Korea was not able to take part in the decision-making process in company-based health insurance societies while Japanese workers were. The absence of self-governance in the Korean health insurance system reduced incentives for the labour unions to protect their health schemes. Secondly, the Korean government conferred small credibility to support for the municipal health insurance. The subsidy for municipal health schemes in Korea was provided at the discretion of the central government and local government had no legal responsibility for its municipal health funds. These regulations were in stark contrast to the Japanese regulations. It made the friction with the idea of universal health care in Korea. Thirdly, the socially oriented unionism and dense network be- tween trade unions and reformers in Korea contributed to the integration of the health insurance system through creating intensive policy learning for solidarity in- side labour movements. In contrast, the cooperative labour-management relationship and their strong networks in the Japanese healthcare policy arena led to the coalition to protect their occupational health funds. iii Contents Abstract..................................................................................................................................ⅲ List of tables...........................................................................................................................ⅵ List of Figures.........................................................................................................................ⅶ List of Abbreviations ..............................................................................................................ⅷ Acknowledgements...............................................................................................................ⅹ Chapter 1 Introduction........................................................................................................... 1 1.1 Research question..............................................................................................................1 1.2 Critique of the relevant literature..................................................................................... 4 1.3 Methodology and data......................................................................................................5 1.4 The aim of this research...................................................................................................10 1.5 Significance of research and its contributions.................................................................12 1.6 Structure of thesis........................................................................................................... 14 Chapter 2 Literature review and analytic framework......................................................... 16 2.1 Literature review on health care reforms ………………………………………………………………….. 16 2.2 Theoretical framework…………………………………………………………………………………………….....28 2.3 Arguments.......................................................................................................................36 2.4 Conclusion........................................................................................................................37 Chapter 3 The politics of health care reforms......................................................................39 3.1 The distinctiveness of health care service and its politics...............................................39 3.2 Typology of the health care systems...............................................................................40 3.3 Reforms in the Bismarckian health care system..............................................................43 3.4 The Debate between the single-payer and multi-payer system......................................46 3.5 Conclusion........................................................................................................................50 Chapter 4 Political context of the health insurance reform in Korea..................................51 4.1 Historical development of health insurance in South Korea...........................................51 4.2 The structure of health insurance system in South Korea before reform.......................53 4.3 Major problems in the health insurance system.............................................................60 4.4 Major actors related to the health insurance system.....................................................66 4.5 Conclusion……………………………………………………………………………………………………..……………73 Chapter 5 Political context of the health insurance reform in Japan..................................75 5.1 Historical development of health insurance in Japan......................................................75 5.2 The structure of health insurance in Japan before reform..............................................79 5.3 Major problems in the health insurance system………………………………………………………….85 5.4 Major actors related to the health insurance system before reform..............................92 5.5 Conclusion………………………………………………………………………………………………………………..…99 Chapter 6 The political dynamics of health insurance reform in South Korea .................101 6.1 Reform attempt after democratisation between 1987 and 1989.................................101 6.2 Labour, the reshaping of a coalition, and the introduction of a partial reform between 1990 and 1997…………………………………………………………………………………………………………………112 6.3 Large-scale health insurance reform between 1997 and 2003.....................................133 6.4 Conclusion......................................................................................................................143 iv Chapter 7 The political dynamics of health insurance reform in Japan............................ 145 7.1 Health insurance reform trial in the 1990s....................................................................146 7.2 Koizumi era reforms.......................................................................................................161 7.3 The DPJ’s failed reforms.................................................................................................177 7.4 Conclusion......................................................................................................................187 Chapter 8 Comparative politics of health insurance reform in Korea and Japan …………..189 8.1 Comparison of Korean and Japanese health insurance reform ………………………….……. 189 8.2 Labour’s significant role in the health insurance reform…………………………….……………. 191 8.3 Ideational and Institutional differences in Korea and Japan ……………………………………..194 8.4 Interactions between ideational and institutional factors and reinterpretations of insti- tutional meanings…………………………………………………………………………………………………………..197 8.5 Conclusion......................................................................................................................201 Chapter 9 Conclusion..........................................................................................................203 9.1 Theoretical contributions..............................................................................................203 9.2 political implications..................................................................................................... 205 9.3 Closing remarks............................................................................................................. 206 Bibliography……………………………………………………………………………………………………………………208 Appendix1: List of interviewees.………………………………………………………………………………….…234 v LIST OF TABLES Table 3.1 Incentive structures on health insurance reforms on the basis of the level of risk and in- come.....................................................................................................................................................46 Table 4.1 Health insurance coverage from 1977 to 1989.....................................................................53 Table 4.2 The structure of health insurance programmes in Korea (as of December 1991)…….…..….54 Table 4.3 The trend of health care spending in South Korea...............................................................60 Table 4.4 Estimates of the volume of health care in the late 1990s.............................................61 Table 4.5 Diffusion of medical technology in South Korea...................................................................62 Table 4.6 The financial