Public medical centers face crisis due to bloated deficits during pandemic

Ambulance crew transfer a COVID-19 patient to the National Medical Center in Seoul, Aug. 21, 2022. Yonhap

Public medical centers that were designated by the government to treat COVID-19 patients during the pandemic have been driven into a corner due to snowballing deficits, according to financial data released by the Korea Health Industry Development Institute (KHIDI), Thursday.

On the other hand, the so-called “big five” hospitals in Seoul — Seoul National University Hospital, Seoul Asan Medical Center, Samsung Medical Center, Severance Hospital and Seoul St. Mary’s Hospital — have seen huge profit growth during the same period.

The varied outcomes were attributed to disparities in government support, according to officials from public medical centers and a medical workers’ union.

They said the government offered more financial aid to private hospitals to secure beds for seriously ill patients, whereas public medical centers that deployed all their possible resources to treat COVID-19 patients were supported insufficiently.

According to KHIDI, the National Medical Center, a public medical institute, suffered a deficit of 34 billion won ($25 million) in 2019, before the pandemic. However, following the country's first reported COVID-19 case on Jan. 20, 2020, the deficit increased to 70.3 billion won that year, 57.7 billion won in 2021 and 72.7 billion won in 2022.

Seoul Red Cross Hospital and Seoul Medical Center experienced similar situations. Seoul Red Cross Hospital's deficit escalated from 5.4 billion won in 2019 to 23.9 billion won in 2022, while Seoul Medical Center's shortfall rose from 28.8 billion won in 2019 to 81.5 billion won in 2022.

Other public medical centers located outside Seoul have also seen deficits widen during the pandemic.

An official at Seoul Red Cross Hospital said the medical institution could not treat other general patients after it was designated as a COVID-19 treatment facility in August 2020.

“At the time, many patients left the hospital, and the number of patients has not rebounded even after the designation was lifted in May 2022,” the official said.

In contrast, the country’s five biggest general hospitals have enjoyed drastically increased profits during the same period.

Seoul Asan Medical Center’s profits stood at 55.1 billion won in 2019 and increased to 169 billion won in 2022, while Severance Hospital’s profits rose to 68.4 billion won in 2022 from 5.1 billion won in 2019.

Those profits were attainable due to various benefits provided by the government, including support for operating costs, equipment and personnel expenses. This assistance aimed to secure beds for seriously ill patients from private hospitals during the pandemic.

But public medical centers could not receive sufficient compensation for their sacrifice and losses, an official at the Korean Health and Medical Workers’ Union said.

The official pointed out that private hospitals could maintain most of their functions even during the pandemic, as they offered some of their ICU beds for COVID-19 patients, receiving huge compensation from the government.

“Public hospitals, on the other hand, let other patients out to concentrate on treating COVID-19 patients,” the official said, urging the government to increase support for these hospitals.

During a meeting with the heads of public medical centers, Wednesday, Health Minister Cho Kyoo-hong said the government is well aware of their difficulties caused by the falling numbers of patients and medical professionals.

“I hope the government’s 2024 project to support public hospitals could help restore financial health and enhance capacities,” he said.