Cutting drug addiction treatment raises health insurance costs, report warns

South Korea's current policy of managing drug addiction primarily through punishment is unlikely to ease the burden on national health insurance finances, the National Assembly Research Service said Tuesday.

Medical costs for patients who discontinue treatment are more than four times higher than for those who continue, the report found, prompting the agency to recommend shifting policy emphasis toward long-term treatment and rehabilitation.

The report, titled "Treatment Discontinuation Among Drug Addiction Patients and the Growing Burden on National Health Insurance Finances" and published Tuesday, analyzed national health insurance claims data from 2015 to 2024. It found that drug addiction-related medical costs are not distributed evenly across all patients but are concentrated among those who stop treatment, medical aid recipients and patients with multiple comorbidities.

Patients who discontinued treatment outnumbered those who continued by a factor of two to three in any given year, and consistently recorded higher per-capita annual medical costs as well as higher cumulative costs over the 10-year period.

Regression analysis estimated that, as of 2024, medical costs for the treatment-discontinuation group were approximately 4.3 times higher than for the treatment-continuation group. Medical costs for medical aid recipients were also about 4.5 times those of national health insurance subscribers.

The Research Service said drug addiction patients represent a classic high-cost patient group, as they are hospitalized and visit emergency rooms more frequently than general patients and often suffer from multiple chronic conditions simultaneously. Keeping patients in continuous treatment is therefore the most cost-effective strategy for reducing both national health insurance expenditures and broader social costs, the report concluded.

Evidence from major countries points in the same direction. The United States, the United Kingdom and Canada have combined punishment with treatment through drug courts, treatment-contingent dispositions and community recovery management programs, all of which have reduced both recidivism and high-cost medical utilization among participants.

The Research Service recommended that South Korea shift from a punishment-centered approach to one focused on treatment.

Drug addiction treatment is currently concentrated in a limited number of designated facilities, with general medical institutions playing only a marginal role, making access difficult. The number of designated facilities stands at roughly 30 nationwide, and shortages of specialist personnel and hospital beds were identified as additional obstacles to expanding treatment.

The report recommended overhauling the Narcotics Control Act to center it on treatment and rehabilitation support rather than enforcement, and redesigning the national health insurance and medical aid systems to recognize addiction as a chronic condition requiring long-term management. It also called for consideration of measures such as reducing patient co-payments for those who remain in treatment beyond a certain period, and covering initial consultations and tests for patients re-entering treatment — as well as psychological and social rehabilitation programs — under national health insurance.

Addressing the social debate over whether national health insurance should cover drug addiction treatment costs, the report said cutting treatment does not reduce costs. Allowing treatment discontinuation and relapse to go unaddressed leads to more hospitalizations and emergency room visits, ultimately increasing the financial burden on national health insurance. A shift in perception is needed, it said, to view such spending as a preventive investment aimed at reducing the number of high-cost patients.