As countries confront rising health care spending, policymakers everywhere face a key question: Who benefits from these spending increases?

Consider South Korea, a nation that has sharply increased its per capita health care spending over the past decade, delivering reasonable value in improving health outcomes as measured by rising life expectancy and a reduced overall disease burden. Yet, not all South Koreans reap equal rewards from the country’s health investments, according to a new study. Rather, adults in the lowest-income quintile receive the least health gains for every dollar spent on their care.

Published in the journal Health Affairs Scholar, the study reveals stark income-based disparities in the value of health care — defined as health gains relative to spending — among South Korean adults. The research systematically quantifies how efficiently health spending translates into longer, healthier lives across income groups in South Korea, providing insights into the distribution of health gains relative to health care spending.

“While earlier research often examined disparities in access, utilization, or outcomes separately, our analysis provides a more integrated assessment by jointly examining health care costs and health gains,” explains the research team, including Stanford health economist Karen Eggleston, the director of the Asia Health Policy Program (AHPP) at APARC. Eggleston’s co-authors are Sungchul Park, an associate professor in Korea University’s Department of Health Policy and Management; Young Kyung Do, a professor in Seoul National University’s Department of Health Policy and Management and AHPP’s inaugural postdoctoral fellow; and David Cutler, the Otto Eckstein Professor of Applied Economics at Harvard University. 

Their findings are sobering: between 2010 and 2018, South Korean adults in the lowest income quintile derived the least value from increased health spending compared to those in the middle- and higher income quintiles, suggesting a system that underserves the poorest population.

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Poorer Health, Smaller Gains

Between 2010 and 2019, per capita health care spending in Korea increased from $1,211 to $1,903, growing nearly 6 percent annually. During that decade, life expectancy climbed from 80.5 to 83.7 years, while disability-adjusted life years – expressed as the number of years lost due to ill-health – declined significantly. These measures seemingly suggest health spending has yielded solid returns in terms of improved health outcomes.

Yet stark income inequality persists in Korea. The country has both the highest old-age poverty rate and the largest share of out-of-pocket medical expenses among OECD countries. Does rising health spending benefit all segments of society equally?

To answer this question, the researchers analyzed trends in health spending and outcomes across income quintiles (excluding the bottom 10 percent of the household income distribution) from 2010 to 2018.

They measured health care spending as total medical expenditures, including costs for inpatient and outpatient services, emergency services, and prescription medications. All spending measures were adjusted for inflation and are reported in 2021 US dollars. To asses health outcomes, they used three indicators: (1) health-related quality of life, which relies on standard questionnaires to measure individuals’ perceived physical and mental health over time; (2) life expectancy, calculated using life table methods based on enrollment data from the national health insurance system; and (3) quality-adjusted life expectancy (QALE) at age 25, a measure that reflects both longevity and the quality of life during those years – an essential consideration when evaluating the effectiveness and equity of health care systems. To quantify the value of health care across income groups, the researchers applied statistical methods.

They found that adults in the lowest-income quintile experienced the smallest relative improvement in QALE over time: an increase of 0.7 years, compared with 1.4 years in the second and third quintiles, 1.3 years in the fourth, and 1.2 years in the highest quintile. Translated into a value estimate, adults in the lowest income quintile incurred $78,209 per QALE; in contrast, adults in the second through highest income quintiles achieved greater value estimates of $47,831, $46,905, $31,757, and $53,889, respectively. Thus, the most efficient gains in both longevity and quality of life were in the middle-income groups.

“We found that per capita spending was similar across income groups, but the lowest-income quintile experienced much smaller gains in QALE,” Eggleston and her collaborators write. 

Reflecting the principle of diminishing returns, “these findings highlight structural inequities in the South Korean health system and emphasize the need for targeted policies to promote equitable health care value.” 

Why Spending Does Not Equal Value

While the study did not identify causal pathways, secondary data suggest two plausible explanations for the results: poorer baseline health and greater unmet needs.

The data indicate that adults in the lowest-income quintile had significantly higher rates of chronic disease, disability, behavioral risk factors such as smoking and obesity rates, and mental health issues. These factors make it more difficult to achieve health gains.

Moreover, adults in the lowest-income quintile were less likely to receive preventive services, with markedly lower rates of medical checkups and cancer screenings. “Despite greater health needs, these adults faced persistent barriers to accessing care, particularly financial constraints,” the researchers say.

Notably, the highest value of health spending was not observed among adults in the highest-income group. One explanation is that this group may consume more low-value or marginally beneficial health services.

Policy Implications: Efficiency with Equity

Eggleston and her co-authors emphasize “the need for health policy in South Korea to prioritize both equity and value.” They highlight the following targeted strategies to improve efficiency and fairness:

• Invest in high-value services that link spending to meaningful health outcomes:
  • Improve access to high-value preventive and primary care services by expanding financial protections, particularly for lower-income groups.
  • Improve overall system efficiency by reducing the overuse of low-value health care services.
• Pair health care reform with broader social policies: Coordinate efforts to address upstream factors tied to health disparities, such as income inequality.
• Aim for improvements across the entire population: Implement evidence-based clinical appropriateness guidelines to ensure health care spending yields meaningful and equitable results.

While focused on South Korea, the study’s findings illuminate how income inequality interacts with health system designs and carry lessons for other countries.

“In countries with greater income inequality and fragmented health systems, such as the United States, disparities in health care value may be even more pronounced,” the co-authors write.

As South Korea and other countries continue to invest heavily in health care, the study highlights the urgency of improving the distribution and impact of that increased spending. Without focused reforms, it risks entrenching existing inequities rather than alleviating them.

Polina Aldoshyna is a Ukrainian lawyer and civic leader with over nine years of experience in law, public administration, and nonprofit management. She currently leads the BGV Charity Fund, overseeing social projects that support vulnerable communities. In addition, she serves as a Deputy of the Zhytomyr Regional Council, focusing on local governance and social policy. Throughout her career, Polina has managed over 60 humanitarian projects, including the establishment of psychosocial support centers and aid programs for displaced individuals and veterans.

Project: Institutionalizing Resilience Centers for Postwar Recovery 

Polina is currently working on transforming Ukraine’s emerging resilience centers—grassroots hubs that provide psychosocial support, legal aid, and essential services to displaced and vulnerable populations—into a sustainable, institutionalized model of community-based social infrastructure. While these centers have played a critical role in the war’s social response, many still lack unified standards, stable funding, and digital infrastructure, limiting their long-term impact.

Her project explores which governance structures — municipal, civic, or hybrid — are most viable in Ukraine’s decentralized context, how public, private, and donor financing can be blended to support long-term operations, and how digital tools, such as CRM systems and reporting platforms, can professionalize service delivery. Drawing on global models, such as Resilience Hubs in the United States, Polina aims to co-design a scalable framework for resilience centers that can be integrated into Ukraine’s broader post-war recovery strategy.

To support this work, Polina is interested in meeting with NGOs, charitable foundations, and private philanthropists who support Ukraine in the reconstruction of human social capital in the United States. She hopes to learn how democratic institutions adapt and deliver services during crisis and post-conflict transitions, as well as engage with scholars and practitioners working at the intersection of governance, social development, and recovery.
 

Oleksii Movchan is a Member of the Ukrainian Parliament and Deputy Chairman of the Verkhovna Rada Committee on Economic Development, representing the “Servant of the People” faction. He chairs the subcommittee on public procurements and state property management, and is active in inter-parliamentary groups with the USA, UK, Japan, and others. Before parliament, he led projects at Prozorro.Sale. Oleksii holds degrees from Kyiv-Mohyla Academy, Ukrainian Catholic University, and Kyiv School of Economics. He has advanced key reforms in procurements, state-owned companies, and privatization to support Ukraine’s European Union integration.

Project: Improving Corporate Governance in Municipally-Owned Enterprises (MoEs) in Ukraine

Oleksii is currently working to improve the governance of Ukraine’s municipally owned enterprises (MoEs), which number nearly 14,000—more than triple the number of state-owned enterprises. While some MoEs serve as critical infrastructure providers in areas such as water, heating, and public transport, most operate without modern governance standards. Over 82% are unprofitable and many are subsidized, making them susceptible to inefficiency, mismanagement, and corruption. These shortcomings erode public trust, distort competition, and weaken essential service delivery.

His project focuses on designing and advocating for national legislation to institutionalize OECD-based governance practices across approximately 60 high-impact MoEs in 19 cities. Proposed measures include strategic property management policies, independent supervisory boards, transparent CEO selection, and robust audit, compliance, and risk management systems. The legislation also calls for standardized financial reporting and regular external audits to enhance transparency and creditworthiness.

To support this work, Oleksii is drawing on Ukraine’s pilot reforms in Mykolaiv and Lviv, as well as prior SOE governance reforms since 2015, and global best practices from EU and OECD countries. He is particularly interested in how institutional reform can advance anti-corruption goals and how reformers in other countries have successfully designed and implemented large-scale changes. He hopes to meet with Stanford faculty, civic technologists, and philanthropic organizations, such as the Stanford Cyber Policy Center, Code for America, and the Skoll Foundation, to explore how policy and technology innovations can support municipal reform and Ukraine’s post-war recovery.
 

Maria Golub is a recognized expert on Ukraine’s European and Euro-Atlantic integration, with deep expertise in EU-Ukraine bilateral relations. Based in Brussels, she currently serves as a Senior Political and Policy Advisor to Ukrainian leadership, where she advocates for a just and lasting peace in Ukraine and supports the country’s advancement along the EU integration path through a decisive reform agenda. She is also actively involved in shaping Ukraine’s reconstruction strategy and is a strong proponent of the “build back better” principle, championing an ambitious revival plan for the country.

Project: Building a National Recovery Platform and Transatlantic Innovation Alliance

Maria is currently working to establish a national Coalition for Recovery—an inclusive, cross-sectoral platform designed to unify Ukraine’s defense, reconstruction, and reform agendas. As Ukraine faces the twin imperatives of resisting ongoing military aggression and laying the groundwork for long-term renewal, Maria’s project aims to ensure that recovery planning is not siloed but instead integrates priorities across security, governance, innovation, and transatlantic cooperation.

The Coalition will convene key domestic and international stakeholders to shape Ukraine’s internal reform agenda, embed EU and NATO-aligned governance standards, and streamline policy frameworks across recovery sectors. A core pillar of the project is embedding security priorities and military technological innovation directly into the recovery strategy, positioning defense modernization as a foundation — not a separate track — for rebuilding state capacity and competitiveness. In tandem, Maria is developing the concept for a large-scale technology and defense innovation alliance between Ukraine, the EU, and the United States. By fostering deeper collaboration in emerging technologies and military-industrial partnerships, the initiative seeks to contribute to Ukraine’s economic resurgence in 2025–2026 and anchor its strategic integration into the Euro-Atlantic community.

Maria is particularly interested in successful strategies and action plans that demonstrate how countries emerging from large-scale conflict can simultaneously pursue national recovery and build resilient, future-oriented security and defense architectures. She aims to explore cutting-edge developments in the tech and military tech sectors, as well as innovative tools like digital twin cities, to help design an integrated national revival plan. In addition, she hopes to deepen her understanding of how AI tools and techniques can support planning, coordination, and implementation across Ukraine’s postwar recovery landscape.
 

Alyona Nevmerzhytska is CEO of hromadske.ua, Ukraine’s leading independent online media platform. She began her career in 2012 at the Kyiv Post and has since focused on business development and organizational strategy. At hromadske, she has enhanced audience engagement and strengthened data-driven decision-making. Committed to building sustainable models for independent media, she ensures ethical newsroom operations and promotes democratic values. She is a graduate of the Stockholm School of Economics, an Atlantic Council Millennium Fellow, and a 2024 McCain Institute Global Leader.

Project: Strengthening Independent Media for Postwar Accountability and Recovery

Alyona is currently working to build a more resilient and innovative media ecosystem in Ukraine that can serve as both a watchdog and a unifying force during the country’s postwar recovery. As CEO of Hromadske.ua, she is leading efforts to combine investigative journalism, compelling storytelling, and technological advancement with a focus on financial sustainability and editorial independence.

Her project explores how independent media can most effectively cover Ukraine’s complex reconstruction process — holding public institutions and international aid mechanisms accountable while also building trust across communities fractured by war. Alyona is particularly interested in leveraging technology, including AI tools, to enhance investigative capacity, analyze data, and uncover patterns of corruption or inefficiency in recovery efforts.

Through the SU-DD fellowship, she also seeks to explore global models for sustainable journalism beyond donor-driven funding, learning how to strengthen independent media institutions to ensure their long-term viability and public impact. A key area of inquiry is the ethical integration of AI into journalism, ensuring that innovation does not compromise transparency, integrity, or audience trust. Alyona is eager to connect with Stanford faculty in communication and business, as well as experts, to explore sustainable models for independent journalism and civil society resilience. She is also interested in meeting with philanthropic organizations, alongside tech leaders, and Ukrainian NGOs to strengthen partnerships that support innovative, mission-driven media.