The Ministry of Health and Welfare last week approved the establishment of the country’s first foreign-owned for-profit hospital despite vehement protests by progressive civic groups and medical organizations.
According to a plan submitted by China’s Greenland Group, the three-story Greenland International Hospital will be built on Jeju Island at a cost of 77.8 billion won. The group plans to open the hospital with 47 beds in March, 2017. It will offer cosmetic surgery, skincare, internal medicine and physical check-ups, primarily targeting Chinese tourists.
All hospitals in Korea are non-profit ones run by non-profit corporations that must reinvest proceeds only for medical purposes. In 2012, the health ministry changed its regulations to allow the birth of for-profit hospitals in eight free economic zones and the southeastern island if half of the total amount of investment comes from foreign investors.
Despite the change, however, no for-profit hospital has been allowed amid criticism over the commercialization of medical care. Local patients can receive treatment at for-profit hospitals if they forgo their health insurance coverage.
The ministry’s approval of the first profit-oriented hospital sparked fears that it will serve to open the floodgates for more of them across the nation as rich local patients, dissatisfied with current medical services, flock to them.
Detractors warn that the spread of for-profit hospitals will result in higher medical costs, bringing chaos to our universal health insurance system that has won international fame for providing equal medical services on condition that medical insurance premiums differ according to income.
Also, there is concern that local non-profit medical institutions or companies might seek forays into the for-profit hospital business indirectly by luring foreign capital, although the health ministry dismissed such a possibility.
These concerns seem legitimate, given the danger that the approval of this hospital could shake the very foundation of the country’s health insurance.
However, it’s also deniable that the promotion of the medical sector ― a representative service industry ― is badly needed to help create more jobs and boost medical tourism at a time when Korea’s competitive edge in manufacturing is fading fast. And it’s no secret that the country’s top talented people are engaged in the medical industry.
The first for-profit hospital license is long overdue, considering that the government began to move in this direction as early as 2002; but to no avail then, in the face of inflammatory allegations over the privatization of medical services by opposition parties and civic groups.
But the time has come for the nation to step up efforts to create jobs and increase revenue in the medical sector by easing regulations. This urgency is evidenced from the fact that Asia’s developing countries such as Thailand as well as industrialized ones are eager to promote their medical sectors at the national level.
So it’s necessary for the government to decide on its next move after carefully examining ripples from the approval of the first such hospital. But the prerequisite is that the public nature of medical services must not be compromised.