Power of not-for-profit

By Kim Da-ye

In the past few decades, the business world has sought to maximize profits on an unprecedented scale. In the name of efficiency, companies squeezed their business partners, laid off employees and tried to enter every market they could to make additional money.

People began questioning if this was the right way to do business and philanthropy became a trendy word. Bill Gates, after lengthy efforts to protect Microsoft’s monopoly, quit his position as CEO and became devoted to the fight against disease and poverty with his wife. Investor Warren Buffet pledged that he would give back 99 percent of his wealth to society.

Long before they made such commitments, Lee Gil-ya, the chairwoman of Gachon Gil Foundation, had already started her own noble journey.

In an interview with Lee, this reporter initially hoped to hear how the country’s most successful female CEO with an independent fortune, succeeded in the business of running universities and hospitals. However, she refused to be labeled as a businesswoman.

“Before responding to questions, I want to make it clear that I’ve never thought in my life that I was doing business,” Lee said firmly.

“Public service has been my principle. While I was working for the communities and the country, the Gil Hospital naturally grew to become the foremost medical center and Gachon University expanded.”

In Korea, all universities and hospitals must be not-for-profit. But some that lacked proper management ran into financial trouble and those acquired by large conglomerates improved quickly.

This reporter tried to find out what made Lee a good business leader, but Lee’s answer was simple: she worked hard for the public good. Her secret formula was, in a way, not to pursue profit.

When she returned from the U.S. and opened a large clinic in 1968, she became famous for not requiring deposits.

Due to the fact that the country was so poor back then and many people could not pay for medical services, most clinics and hospitals required patients to pay deposits before being treated. Lee did not require it until the national health insurance system was introduced in 1977, and her clinic was always crowded.

She also treated impoverished patients for free or at reduced charges. Some would pay in return with crops and fish, and the front yard of the clinic was stacked with vegetables from different towns in Incheon.

As she had to treat a constant stream of patients, she recalls that she rarely went out or dined at restaurants, let alone going on dates. Lee and her nurses steamed corn brought by patients and ate it as a nighttime snack. She eventually learned the specialties of each area in Incheon — for instance, goby, a kind of fish, from Songdo, corn from Deokjeok-do, vegetables from Guwol-dong and sea squirt from Soraepogu.

“I lived like that for nearly 20 years. A few years ago, I had the chance to write a column in a newspaper. When I looked back on myself as a young 30-something female doctor, I fell in love with her as she was really nice,” Lee said.

Her clinic was flooded with patients, and she amassed a fortune despite the “no deposit” policy and free services for the poor. She decided to build a general hospital.

By law, a general hospital could be operated only by a medical corporation, a non-profit entity. In 1977, she put her entire personal wealth into the non-profit body and a year later, opened a hospital with 150 beds.

In her autobiography, she said one doctor asked what the benefits and losses of running a medical corporation were. She wrote that she replied, “Basically, you are donating your hospital to society and the country. You must not consider it as your own wealth.”

Her medical corporation later operated a hospital in Cheorwon, Gangwon Province and another in Baengnyeongdo near the Northern Limit Line. Both are in the regions close to the border with North Korea with a small population and were destined to be unprofitable. Lee says that Cheorwon Gil Hospital still records the loss of hundreds of millions of won each year while she had to give up the hospital in Baengnyeongdo after six years of operation in 1995.

Her wealth no longer belonged to her, but the non-profit hospitals led to more opportunities. The general hospitals became the bedrock for today’s medical school and research centers for cancer, diabetes and neuroscience.

Lee says she collects salaries only from the hospitals. Her income from the university goes to a scholarship fund.