Seoul Plans to Allow Profit-Seeking Hospitals
By Yoon Ja-young
Staff Reporter
Globally competitive, mammoth hospitals are expected to emerge here as the government plans to allow for-profit medical centers.
The Ministry of Strategy and Finance is preparing a plan to develop the medical services industry, and a public hearing will be held at the Korea Institute for Health and Social Affairs on the matter, March 13.
Unlike traditional non-profit hospitals, investor-owned hospitals will be allowed to make profits for shareholders.
They are likely to provide high-quality services thanks to the abundant capital they can raise from investors or by issuing bonds.
The government, which has been pondering ways to enhance competitiveness in the services sector, has taken medical services as one of the country's possible future cash cows. Plastic surgery clinics, for example, are already attracting customers from Japan and other Asian countries by providing quality services for relatively small fees.
It expects the measure to help decrease the deficit in the medical services account, which amounts to an annual $60 million as high income earners seek healthcare abroad.
The government also emphasizes that most private hospitals are being set up for profit even though they are non-profit entities.
However, those opposing for-profit hospitals are raising concern that they will provide services targeting only affluent patients, diverting medical resources and eliminating the opportunity for regular patients to receive good medical services. The previous Roh Moo-hyun administration sought to allow for-profit hospitals, but met fierce opposition from NGOs, fearing it could result in a hike in medical services fees.
The government, however, says that even these for-profit hospitals will be subject to national health insurance, which means they won't be allowed to raise fees at will. Only fees for services not covered by the insurance will be at their disposal.
According to a survey by the Korea Development Institute (KDI), over 70 percent of respondents were receptive to private investment in the medical services sector. Two out of three respondents, however, also showed concern that the measure could widen the gap between high and low quality medical services.