Korea Overlooks Soaring Medical Fees on Foreigners
By Lee Tae-hoon
What is the strength of Korea's medical tourism industry? The answer seems too obvious to many, as almost all of them would say, ``low-cost, high-quality health care.''
However, two studies conducted by state-run bodies reveal that they are wrong.
The findings show Korea, the latest comer in the fast-growing medical tourism business, is already losing its price competiveness over competitors.
They are also raising questions whether Korea was too hasty in jumping on the medical tourism bandwagon.
The Korean Tourism Organization (KTO) clearly states on its Web site that medical costs in Korea remain at a fraction of the prices in the United States and even cheaper than those in Japan and Singapore.
``Korea's per capital medical cost ranks only 23rd among the 30 member countries of the OECD,'' the KTO Web site reads. ``Treatment fees are one-tenth of those in the U.S., one-fifth of those in Japan, and half of those in Singapore.''
Anyone who reads the site will soon be convinced that Korea is the right place for high-quality, affordable medical treatment.
However, the KTO's 2008 survey of foreign patients finds that the conventional assumption is mistaken and will make people wonder if it is worth travelling to Korea to look for bargain medical treatment.
The survey shows that American patients who had undergone similar procedures both in Korea and the United States found that medical fees here were roughly 80 percent of the prices in their homeland. That's an eight times difference in price between those advertised on the KTO Web site and its own survey.
Americans also answered that they felt they had to pay roughly 130 percent more to have the same plastic surgery here compared to the procedure in the United States, a country known to have by far the most expensive health care system in the world based on health expenditure per capita.
In short, the surveyed patients realized that they could only save a few hundred dollars for most of the frequently-sought-after medical procedures here.
It casts doubts on whether they would have considered coming all the way here, had they known that the price difference might not be sufficient to cover their flight tickets.
The 2008 findings show that Chinese patients also found medical fees in Korea were more expensive than those in their homeland.
The Korea Health Industry Development Institute (KHIDI) said that the medical price disparity between the ones stated on the KTO Web site and its own survey can be attributed to the emergence of a two-tier pricing system here.
The full fee for Korean medical treatment, which includes the cost that a local patient pays and the National Healthcare Insurance subsidizes, is roughly one tenth of those in the United States, according to Lee Young-ho, a KHIDI marketing director.
Lee claims that foreigners pay roughly 1.5 to 2 times more than the stated rates, considerably lower than The Korea Time's survey results of 2.5 to 3 times.
He says the discriminatory pricing is necessary because Korean hospitals have to offer customized services to foreigners, such as interpretation services and airport pickups.
The KHIDI's Web site says the overall price is 20 to 30 percent of the cost in the United States,
Yet, the figures are still much lower than those in the latest survey by the state-run think tank. The KHIDI describes Korean hospitals' price competiveness on its Web site as being, ``Less expensive than international hospitals in China and similar to the price of private hospitals in Singapore.''
However, the KHIDI report discloses that foreigners paid three times more, 345 percent to be precise, to treat the same illnesses here last year, when compared to Chinese hospitals.
The latest findings also indicate that Korea has lost its competitive edge over Thailand and Singapore, two of the most popular medical tourism destinations in Asia.
The study shows, in comparison with Korea, a heart bypass could be performed at a quarter of the cost in Thailand or half in Singapore; spinal fusion surgery was nearly five times cheaper in both of the two Southeast Asian countries in 2009.
On average, medical costs were almost four times lower in Thailand and 20 percent lower in Singapore last year.
Korea has adopted discriminatory medical fees for foreigners taking the view that the pricing is globally competitive due to the nation's high quality medical services.
In contrast, countries known as top medical tourist destinations are cautious in setting such a two-tier pricing system for foreigners.
This is because most foreign patients consider two-tier pricing grossly unfair, even if the services provided are cheaper than those in their homeland.
Major hospitals in Thailand, which attract more than one million medical tourists a year, charge the same rate to foreigners as locals, with the exception of a modest fee for interpretation and pick-ups.
In Singapore, where some 200,000 overseas patients flock every year, foreigners pay slightly more as the government has reduced health subsidies given to non-Singaporean citizens from 2008.
In other words, foreigners used to pay slightly less than the full fee in Singapore.
In Singapore, hospitals are mandated by law to display a detailed price list of medical fees for medical tourists. Large hospitals in Thailand, including Bumrungrand International Hospital, also clearly display medical cost information on their Web sites.
Some critics are concerned that Korea's bait and switch tactics in luring foreign patients may even result in legal disputes with its rival countries.
``Countries like Singapore may find Korea's emphasis on low medical costs to lure foreign patients as against fair trading,'' said an official of Docstour, a leading medical tourism agency here.
In early 2009, the Ministry for Health, Welfare and Family Affairs attempted to set price guidelines for foreign patients, but withdrew this after strong opposition from the concerned hospitals.
Under the Medical Law, hospitals have been obliged to post a list of fees for medical treatments not covered by insurance in a booklet and on their Web sites from Feb. 1. However, hospitals here are reluctant to make such a list for foreign patients, claiming foreigners are not subject to the law.
In an interesting twist, the Korean government is planning to launch a ``mature global citizenship'' campaign for the successful hosting of the G-20 Summit in November. One of the main objectives of the drive is banning the practice of overcharging foreigners.
Some critics say medical tourism may siphon attention from local patients. They say major hospitals are already allowing queue jumping to medical tourists, making the waiting time longer for local patients.
They point out that the high-quality services offered to foreign patients may create inequality in the provision of and access to healthcare services as an influx of wealthy foreign patients will take away the limited resources, and healthcare professionals in Korea.
In terms of the quality of healthcare, the World Health Organization (WHO) ranks the Korean health care system well below most of developed countries, even lower than Thailand and Singapore.
The ranking of the world's health systems last produced in 2000 places Singapore at No. 6 and Thailand, 47th.
The WHO points outs that Korea, which had 1.7 doctors per 1,000 patients in 2007, the second lowest among OECD countries, lags behind its Asian rivals, ranking it 58th out of the 190 countries surveyed.