With the goal of reducing the copayment amounts required of patients, the Korean government first established the Mid-Term National Health Insurance Plan for the period from 2005 to 2008, and followed it up with two subsequent Reinforced Mid-Term Insurance Plans spanning 2009 to 2013 and 2014 to 2018, consistently expanding the range of health insurance coverage for the Korean public. As a result, the copayment rate for cancer patients was reduced from 20% to 10% in September 2005, and again to 5% in December 2009.

Although the Korean government has been increasing health insurance coverage and benefits for serious diseases, including cancer, some criticize this policy trend on the grounds that it encourages moral hazard and a supplier-induced rise in demand for health services. The decreasing cost burden on patients leads to greater competition among medical institutions to attract patients and may increase demand for large hospitals equipped with high-tech equipment and high-caliber medical professionals, thereby aggravating the concentration of patients. This study analyzes the effect of increasing health in surance coverage on the use of medical services in relation to supplier characteristics, with a view to estimating the impact of the policy and highlighting future policy implications.