[Editorial] For-profit Hospitals

The government has recognized the need for for-profit hospitals, but when they will be established is unclear due to differences in opinions between two ministries. Given President Lee Myung-bak’s comment that the matter needs sufficient time for further discussion to prevent public misunderstanding, the introduction of such hospitals will likely be further delayed.

The Strategy and Finance Ministry is in favor of such hospitals and the Health, Welfare and Family Affairs Ministry is opposed. Both ministries have jointly commissioned a feasibility study to the Korea Development Institute and the Korea Health Industry Development Institute. The studies by the two think tanks, however, had contrasting results. Finance Ministry officials said the introduction of for-profit medical institutions is an established fact. Health Minister Jeon Jae-hee, however, said she cannot agree on the plan presented by the Finance Ministry. Policy differences between ministries are nothing new, but the dispute over for-profit hospitals has raged on for five years.

Establishing such hospitals is an effective way to raise the needed funds for the advancement of the domestic medical industry. Massive investment is necessary into all kinds of medical services for serving the people and attracting foreign patients. The medical industry can emerge as a growth engine by creating decent jobs. This is why deregulation is needed to raise the diversity of the medical business. The two think tanks also agreed that for-profit hospitals will have an economic generating effect and create jobs.

Critics of for-profit hospitals warn that doctors will flock to highly profitable medical institutions and prefer treating foreign patients. They also say the public health insurance system will be undermined. These fears, however, can be relieved through proper policy measures. The Finance Ministry will maintain a system requiring hospitals to treat all patients covered by the National Health Insurance Corp. to prevent unfavorable side effects. The health industry institute said the introduction of for-profit hospitals will lead to higher medical costs for the people. The increase, however, is due to the additional costs of high-quality medical services. Nurturing the medical service sector, which has yet to establish itself as an industry, might see misuse or waste of taxpayers’ money and adverse effects. This, however, is no excuse for rejecting change. Maintaining the status quo will not prevent people from going abroad to get high-quality medical care or creating jobs.

Since the two ministries have conflicting views, the presidential office should either mediate their dispute or take the lead in pushing the plan. The administration, which has a full plate due to debates over the Sejong City and the four-river restoration projects, will probably shun taking on another issue. A further delay, however, will risk losing an opportunity to advance the domestic medical sector. Public misunderstanding cannot be avoided but must be corrected. The presidential office should first declare its support for for-profit hospitals and order the two ministries to devise measures to guard against adverse effects.