Controversy continues over establishment of Korea's 1st for-profit hospital

A coalition of civic groups holds a rally in front of Cheong Wa Dae in this Jan. 21, 2019 photo to protest the establishment of Greenland International Medical Center, a for-profit hospital, on Jeju Island. Newsis

Court rules against ban on hospital receiving Korean national patients

By Lee Hyo-jin

A recent court ruling against a ban on Korea's first for-profit hospital from receiving domestic patients has prompted a strong backlash from doctors and civic groups, who expressed concerns that the ruling may mark the beginning of the privatization of the country's healthcare services.

The decision has added fuel to the ongoing controversy surrounding the opening of Greenland International Medical Center, located on the southern island of Jeju, which was constructed in 2018 by Greenland Group, a Shanghai-based real estate developer.

Under Korea's medical laws, private hospitals should be operated only by non-profit foundations and are heavily regulated by the national health insurance system.

But the country's first for-profit hospital in Jeju was constructed in accordance with another law that permits the establishment of open-investment hospitals in special economic zones ― such as Jeju and Incheon ― if over 50 percent of the capital is financed by foreign investment.

In December 2018, the hospital was granted authorization to open for business by the Jeju Provincial Government on the condition that it only treats patients of foreign nationality and offers medical services limited to four departments: plastic surgery, dermatology, internal medicine and family medicine.

Despite protests from civic groups who feared that the launch of the investor-owned medical institution might eventually lead to the breakdown of the country's public healthcare system, Won Hee-ryong, Jeju's then-governor, justified his decision by saying that the foreign-funded hospital would help revitalize the local economy and create more jobs.

But the official opening of the hospital has been delayed until now, due to prolonged legal disputes.

In February 2019, Greenland Group filed a lawsuit against the Jeju Provincial Government demanding it to nullify the ban on receiving local patients. Following a long legal battle, the Jeju District Court ruled in favor of the medical center on April 5, saying that the local government's ban lacks legal grounds.

The ruling marked another victory for Greenland Group after a January Supreme Court ruling which viewed the local government's decision to nullify its business authorization as illegal.

In April 2019, the Jeju Provincial Government had revoked the hospital's conditional business permit on the grounds that it failed to meet the deadline to start operating, as all medical institutions must begin operating within 90 days of being granted a business license.

Greenland International Hospital on Jeju Island / Courtesy of Jeju Free International City Development Center

A coalition of civic groups that has been fighting against the establishment of Greenland International Medical Center denounced the latest court ruling, as they say that it could prompt the privatization of Korea's medical services.

"Medical fees at for-profit hospitals are not covered by the national health insurance. If the ruling is upheld in higher courts, that would provide the grounds for the establishment of additional for-profit hospitals not only in Jeju, but also in other parts of the country," said Oh Sang-won, a civic activist.

Medical professionals also expressed deep concerns. The Korean Medical Association (KMA), which represents about 130,000 doctors nationwide, criticized the court ruling, as it paves the way for the operation of investor-owned hospitals in the country.

"The fundamental role of a hospital is to protect the lives and safety of patients. This is why the Medical Law limits the operation of medical institutions only to non-profit organizations, as medical services driven by shareholder interests will undermine the medical system," read a statement issued by the KMA, Tuesday.

"The most recent court ruling could serve as the grounds for the legalization of for-profit hospitals, which would be operated for money, rather than for the safety of patients. Such hospitals might shut down less profitable departments that are essential for public health, which would eventually lead to the collapse of the country's medical system," it said.

The Korean Health and Medical Workers' Union called the ruling "the worst court decision in history."

"It is feared to mark the beginning of the operation of the country's first for-profit hospital. This ruling may fuel the establishment of more investor-owned hospitals and serve as momentum to speed up a push for the privatization of medical services under the incoming Yoon Suk-yeol administration," the union said through a statement.

The union called on the former Jeju governor, who currently serves as the planning chief of Yoon's presidential transition committee, to take responsibility for having originally granted the authorization to Greenland International Medical Center in 2018.