Purpose: This study was conducted to examine differences in health care utilization and related costs between before and after the introduction of the designated doctor system, and to find out factors making the differences. Methods: Data were collected from 200 medical aid beneficiaries having one or more chronic diseases, registered in the designated doctor system during the year of 2012, and the relationship between the use of health services and claimed medical expenses was analyzed through paired t-test and multiple regression analysis using the SPSS 18.0 program. Results: There was a decrease in the number of total benefit days and the number of outpatient and medication days, but some cases showed an increase after the designation of medical institution. In general, hospital stay increased after the introduction of the system. However, the number of medical institutions utilized was reduced in most cases after designation. Conversely, medical expenses increased in most cases after the designation of medical institution. Conclusion: These results suggest that a detailed scheme to designate medical institutions should be made in consideration of the seriousness of illness and classification of medical institutions not only for the beneficiaries’ enhanced health but for the effective management of medical aid fund.