New hospitals need legal support

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New hospitals need legal support

The government’s efforts to open for-profit hospitals, including foreign-investor-owned chains of hospitals, in free economic zones in Incheon or Jeju Island may finally materialize.

The government is hoping to introduce a for-profit medical care system but, instead of changing the relevant law, it is trying to find ways to skirt around it.

Seoul released an administrative notice last month recognizing the legitimacy of medical practices run by doctors with foreign licenses or by those with experience working at foreign medical institutes.

Previously, foreign doctors needed a Korean permit in order to work at foreign-funded for-profit hospitals. But now, any doctors with licenses certified from abroad can work in the country.

The licensing problem was the biggest stumbling block in creating for-profit hospitals funded by foreign capital in Korea. Foreigners were allowed to open them in 2002 under the former Kim Dae-jung administration, but none have yet appeared due to various legal roadblocks, including the ban on foreign-licensed doctors.

The government has submitted several bills seeking legal revisions, but the legislature, succumbing to pressure and lobbying from the local medical-service industry, has turned them down every time. Several memoranda of understanding to establish joint-venture hospitals with internationally-acclaimed establishments like Johns Hopkins in Baltimore, Maryland, have been cancelled due to opposition from local lawmakers.

The recent notification could remove the bottleneck and pave the way for a for-profit medical service. Other details, such as hospital beds and medical equipment, can be accommodated within medical service and pharmaceutical laws.

For-profit medical service and education are two areas where Korea needs to improve in order to advance the service sector and create new jobs and economic growth. Critics fear for-profit care may result in higher medical bills for the public as the industry excessively chases profits, but the real results will not be known unless the new system is tried and tested.

The notice is a good start. But to make it last, the law must be changed, as foreign investors will only hire foreign doctors when they have certain legal guarantees. Meanwhile, the government must come up with more precise and detailed guidelines on how to establish and operate for-profit hospitals.
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