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Allow for-profit hospitals

Posted November. 22, 2010 11:29,   


Doctors from Seoul National University of Korea have been hired at the world’s largest medical complex that China is building. The university and China’s Yanda Group will cooperate in education, research and diagnosis at China Yanda International Health City. Located in the Yanjiao Economic and Technological Development Zone about 30 kilometers away from Beijing, the medical complex has a hospital with some 3,000 sickbeds, a global medical think tank, a senior citizens’ town for 12,000 people, a nursing institute, and an international convention center. The town shows China’s will to attract medical tourists not only from China but also from the rest of the world.

The establishment of the giant health town was possible because the Chinese government in 2000 let the private sector lead the medical industry. China introduced a for-profit hospital system to allow private capital to invest in medical services while allowing foreign capital to have hospital ownership. Recognizing the medical sector’s potential to stimulate demand and create jobs, communist China allowed for-profit hospitals and opened its market to the world in a move considered more daring than what capitalist Korea did.

China invited doctors from Seoul National because it recognizes the competitiveness of the Korean medical sector. Korean medical students boast top-notch quality to the extent that they nearly dominate their country’s top spots at universities in the annual college entrance exam. While Korean medical students are top-notch, however, doctors call Korean hospitals third rate. Most of the blame is on the fundamentalist view of the public utility role of medical services that makes it impossible for private investors to invest in medicine. Those who see medical services from an ideological point of view ignore the argument that allowing for-profit hospitals and promoting medical tourism can enhance the level of medical services through competition, ultimately heightening the quality of medical services in the country.

Around the world, medical services have long been a business model to create national wealth and jobs. Singapore has earned handsome profits by attracting foreign medical tourists since the 1990s, prompting other countries to follow suit. In Japan, hospitals and tourist agencies work together to attract foreign patients, while Malaysia offers tax benefits to hospitals that cater to medical tourists.

Since its inauguration, the Lee Myung-bak administration has sought to introduce for-profit hospitals open to private investment as a means to promote medical tourism. This campaign, however, is being held back by opposition from even within the ruling party. If this situation continues, Korea will eventually see its people going to China for medical treatment.

Editorial Writer Park Young-kyun (parkyk@donga.com)