This article addresses the debate on whether healthcare privatization risks undermining the intrinsic value of healthcare or is it a necessary change to improve the efficiency and sustainability of the healthcare system.
On August 12, 2014, the government announced a plan to promote the service industry at a meeting on trade and investment promotion chaired by the president. The plan was mainly aimed at the healthcare sector, and included the establishment of medical corporations and expansion of ancillary businesses, deregulation of hospitals open to investment, and expansion of overseas patients. In response, opposition parties and civic organizations have reacted by claiming that this will open the door to medical commercialization. In the midst of this controversy, many Koreans are unclear about the government’s intentions because of the negative connotations of the word “commercialization”. In reality, however, the discussion of healthcare privatization goes deeper. The government’s attempt to improve the efficiency and sustainability of the healthcare system is not a simple matter.
I don’t think it’s necessary to push back on this, but the above proposals are so superficial that they don’t even come close to the real issues at the root of the problem. I’m going to point out what I think shouldn’t even be up for debate. But first, we need to rethink the nature and purpose of healthcare. We shouldn’t forget that healthcare is not just an economic transaction, but an essential public good that protects people’s lives and health. That’s why the commercialization of healthcare should always be approached with caution, taking into account the ethical and social issues that may arise.
Before moving on, let’s clarify the meaning of the terms used by the people and organizations involved, as they are often unclear. In fact, it is often intentionally misleading, which can spark controversy and make it difficult to understand. First, the term “healthcare privatization” is incorrect in South Korea. More than 90% of medical institutions are already privately run. If you think about it, there is no public medical institution that comes to mind except for National University Hospital. Under the current medical law, only doctors and non-profit corporations, including medical corporations, are allowed to establish medical institutions, and most hospitals are operated by them. However, there is a need to define the concept of healthcare privatization. In particular, the long-term effects of privatization need to be analyzed in depth. We need to consider the inequalities in healthcare and the decline in quality that will inevitably occur when healthcare is overly commercialized.
This is because we usually think of commercialization of healthcare in the sense of “medical institutions can make money,” but nowhere in Korea does it say that medical institutions should not make money. Instead, if the founder is a doctor, the profits can be taxed and taken out of the organization, or if the founder is a corporation, the profits must be used for the business for which the corporation was formed. This legal structure is intended to limit the commercial activities of healthcare organizations while maintaining their public character. However, a thorough review of how healthcare organizations are using these regulations in the real world and how they are actually affecting the health and safety of the public is needed.
So, is healthcare privatization really turning hospitals into huge profiteers? The reality is that incorporators can put whoever they want on the board of directors and pay them a salary, which means that there is currently no problem with healthcare organizations making money and taking that money out of the organization.
In the end, it’s important to understand exactly how the for-profit element already exists in the system and how it affects the quality and accessibility of healthcare. Current issues aside, what healthcare privatization actually means is “open to investment” hospitals. In layman’s terms, this means that hospitals are built with the help of outside investors. There is a lack of forecasting and analysis on how this will change Korea’s healthcare system in the long run. The government’s reasoning behind this policy is based on economic logic, but it may undermine the intrinsic value of healthcare.
