First for-profit hospital approved for Jeju Island

by 교선실장 posted Dec 27, 2015


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First for-profit hospital approved for Jeju Island

Posted on : Dec.19,2015 19:37 KSTModified on : Dec.19,2015 19:37 KST

The construction site for what will be South Korea’s first for-profit hospital, in Seogwipo City, Jeju Island, Dec. 18. (Yonhap News)

Civic groups expressing concern that allowing for-profit hospital will lead to commercialized healthcare and lead to higher patient costs

It looks like South Korea’s first for-profit hospital will open on Jeju Island. There are concerns that this hospital will open the floodgates for the commercialization of medical care in the country, undermining focus on the public interest.

On Dec. 18, South Korea’s Ministry of Health and Welfare announced that it had decided to approve Jeju Island’s application for the establishment of a foreign-invested for-profit hospital – to be known as the Greenland International Hospital - by China’s Greenland Group.

In September of last year, the Ministry had refused to approve an application for the establishment of the Saneol Hospital, a different Chinese for-profit hospital, on the grounds that it did not satisfy the legal requirements.

“In our careful review of the business plan in light of related regulations – including a special law for setting up the Jeju Free International City and ordinances about special cases for public health on Jeju Island – we found that the plan satisfied the legal requirements and concluded that there was no reason to block its establishment,” said Kim Gang-rip, chief of public health policy for the Ministry.

These requirements, Kim said, included that the corporation had to be foreign-invested and that the investigators had to have at least US$5 million in capital.

In addition, the group has signed memoranda of understanding about the emergency medical care system with the Seogwipo Medical Center and another medical care provider, and the group has confirmed that it is not planning to perform stem cell procedures or other kinds of treatment that are not permitted under South Korea’s health care laws, the Ministry said.

Now that the Ministry has informed Jeju Island of its approval of the business plan, final approval by Jeju Island’s public healthcare policy review board is the last hurdle that South Korea’s first for-profit hospital must clear.

Since Jeju Governor Won Hee-ryong has said multiple times that the island has to approve foreign for-profit hospitals because they assist the island in its drive to promote the health tourism industry, the hospital is likely to be approved by the island’s review board as well.

Greenland Group is planning to open the hospital for business as early as March 2017.

According to Greenland Group’s business plan, 77.8 billion won (US$65.8 million) will be spent on the construction of Greenland International Hospital in Jeju Healthcare Town in the Topyeong Neighborhood of Seogwipo, with the building composed of four floors, one below ground and three above. The hospital will provide medical treatment in the areas of plastic surgery, dermatology, internal medicine, and family medicine.

While it is likely that most of the patients will be Chinese tourists visiting Jeju Island for plastic surgery or skin treatments, most of the doctors will probably be South Korean, since South Korea’s medical industry has greater expertise in these areas than China.

While South Korea’s central government and the Jeju regional government expect that allowing a foreign for-profit hospital will have the effect of promoting investment in healthcare and stimulating the local economy, civic groups are concerned that the appearance of foreign for-profit hospitals in free economic zones around the country will have an overall negative influence on the healthcare system.

A coalition of medical and civic groups on Jeju Island who are working to block the commercialization of medical care and to strengthen its status as a public good released a statement on Friday calling for the resignation of Chung Chin-youb, South Korea’s Minister of Health and Welfare.

“The Ministry of Health and Welfare is supposed to be protecting the people’s right to health, but its approval of a for-profit hospital is an effective abandonment of medical care as a public good. The decision reduces healthcare to a means of making money and will have a huge effect on Korea’s healthcare system,” the activists said.

Since a for-profit hospital is able to return the profits that are raised through the operation of the hospital to investors, there are considerable concerns that this will accelerate the commercialization of the medical industry.

“Approving this foreign for-profit hospital on Jeju Island will also allow for-profit hospitals to spring up in the eight free economic zones around the country. For-profit hospitals are focused on commercial medical care, which is neither regulated nor covered by the national health insurance program. Allowing such hospitals to open will commercialize healthcare in Korea, eviscerating public medical care and sending the cost of healthcare soaring for Koreans,” the Korean Federation of Medical Activist Groups for Health Rights said in a statement released on Friday.

In a September poll by Jeju MBC that asked Jeju residents what they thought about the efforts of China’s Greenland Group to establish a for-profit hospital, 67.8% of respondents were opposed and only 25% were in favor.

By Huh Ho-joon, Jeju correspondent

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