Korea must make efforts to export hospitals to Middle East

About 70 kilometers northeast of downtown Dubai, the United Arab Emirates (UAE), in the middle of the desolate desert, is the Royal Sheikh Khalifa Specialty Hospital (SKSH), which Seoul National University Hospital (SNUH) has been contracted to operate for 10 years. The 248-bed hospital has more than 100 Koreans among its 800 medical staff. Seoul National University Hospital won the contract in 2014 after competing with global hospitals such as Stanford and Johns Hopkins in the U.S., King’s College in the U.K., and Charité in Germany. This was the first instance of a Korean hospital winning the right to manage an overseas general hospital-level medical institution. An operating budget of 1 trillion won was set for the first five years, and the hospital also received an annual management fee of 7 billion to 8 billion won. Within two years of operation, the hospital had treated more than 50,000 outpatients. In 2019, SNUH successfully renewed its contract and is set to sign a second renewal in the middle of this month.

Will everything go smoothly in the future? First of all, renewing the contract has met with headwinds. The hospital is under the royal family, and suddenly there was competition from another royal family organization that wanted to take over the hospital's management. The royal family also demanded that the hospital reduce operating costs, which would decrease its profitability. Additionally, there were demands to focus on cardiology, neurology, and cancer care, and to restructure other medical specialties. Even as a specialty hospital, it is necessary to maintain some general hospital functions, but eliminating high-demand departments like orthopedics and ophthalmology will reduce the total number of patients and affect profits. Compared to the beginning of its operation, the number of Korean medical staff has decreased, and there are many small and large issues, such as medical service fee cuts and medical disputes. For these reasons, many within Seoul National University Hospital are considering ending their hospital management.

Last year, the healthcare market in the six Gulf Cooperation Council (GCC) member states, including Saudi Arabia and Qatar, reached 67.9 billion dollars. Wealthy Middle Eastern countries are attracting top hospitals and medical schools from around the world, such as the Mayo Clinic, Johns Hopkins, Cleveland Clinic, and Harvard, to raise the standard of local healthcare and attract medical tourists. The UAE alone hosted 674,000 medical tourists in 2022, generating more than AED 1 billion, or 370 billion won, in revenue. Global medical schools and hospitals with a local presence are making strides in clinical research, education, and treatment. It's a market too good to pass up.

There are still many challenges to overcome in exporting hospitals. Although local perceptions of Korean healthcare are improving significantly, U.S. and European hospitals are still preferred under the same conditions. There is also a shortage of doctors and nurses who can easily communicate with foreign patients in English. Since there are few cases of overseas expansion, it is necessary to accumulate know-how for each country and situation. Additionally, there are many practical challenges, such as mutual recognition of medical staff licenses and addressing medical malpractice issues.

In June this year, a 10-story Korean Medical Center opened in Doha, Qatar. Seoul Asan Medical Center, Lime Tree Dental Hospital, JK Plastic Surgery Clinic, and Ahnkang Hospital provide medical services such as infertility treatments, implants, cosmetic surgery, and rehabilitation. Seoul Asan Medical Center is also promoting the 65-bed UAE Asan GI Hospital in Dubai, which is scheduled to open in 2026. Last month, Seoul National University Bundang Hospital took over the project management of the 300-bed Tashkent General Hospital in Uzbekistan. While expanding medical services overseas is economically beneficial, it also plays a diplomatic role in raising the national profile and contributing to bilateral cooperation. We look forward to seeing the establishment of another Royal Sheikh Khalifa Specialty Hospital in the future.