Abstract

To cope with the rapid increase in aging population, the East Asian countries have restructured their welfare states by developing new long-term care system. In particular, the South Korean government introduced new long-term care insurance in 2008. To implement the new LTCI system at a national level, the Korean government had to rapidly increase the number of new LTC service providers and care workforces. At that time, following the western countries’ policy of marketization of care services, the government actively adopted the policies for the marketization of LTC services (Choi et al., 2016; Chon, 2013a, 2015). For-profit service providers were permitted to enter all LTC markets, which previously had been restricted solely to public and not-for-profit service providers, and mechanisms of competition and choice have been implemented.

The aim of the study is to examine why the South Korean government decided to adopt marketization of care policies given the unique historic development of Korean welfare state and the effect of the marketization of long-term care (LTC) services on the provision of services under the Korean long-term care insurance (LTCI) system. By adopting literature review method, the study explored a large number of existing literature on the research topics.

The study found that the residual characteristics of the Korean welfare state such as the strong containment of welfare budgets and private-based service provision have been matched well with the principle of marketization of care such as less provision and financial role by public sector.

The study also found that the marketization of LTC services faces several challenges. Some of the stakeholders, such as home visiting service providers, care workers, and older clients, appear to employ unlawful activities or unprincipled behaviours to maximize their individual interests. The findings also suggest that the unprincipled behaviour, unlawful activities, and financial problems that service providers face contribute to low quality care services