Health sector facing financial woes

Under mounting budgetary pressure, Seoul National University Hospital earlier this month announced it will slash wages for its doctors by up to 1 million won ($942) for the remainder of the year.

The decision, made by the hospital’s management team, was unilateral and had not been discussed with the doctors. The hospital recorded a 12.7 billion won loss last year.

In an effort to find a new source of revenue, Samsung Medical Center has been providing treatment services on Saturdays since August, for the first time in 10 years.

As patient numbers decline, major hospitals across the country are scrambling to find ways to cut spending costs while raising revenue.

In the first eight months of 2013, SNU hospital recorded a 43 billion won loss.

According to Representative Oh Jae-sae of the Democratic Party, of the 44 major hospitals run by the university in the country, 23 of them were operating in the red last year.

In an attempt to rein in spending, SNU hospital declared a fiscal emergency in July, cutting budgets across the board and freezing wages.

Yonsei University’s Severance Hospital also announced it would reduce its spending by 10 percent, while Inje University Seoul Paik Hospital cut spending on doctors’ salaries.

Recognizing that tending patients on Saturdays could boost revenue, an increasing number of hospitals are keeping treatment services open on the weekends, with Samsung Medical Center and Catholic University’s St. Mary’s Hospital following suit.

Hospitals cited the sluggish economy as the primary reason for across-the-board losses. And more and more patients are avoiding visiting major hospitals for treatment because of concerns over treatment costs, doctors say.

“There was [one] patient diagnosed with a stomach cancer,” said Dr.Yang Hyung-gyu of Yang Hospital. “[But] because [he was worried about] medical costs, he did not receive treatment until a point when he had a hole in his stomach wall and [had to have] an emergency surgery.”

At the same time, more services are covered under the expanded national health insurance program - specifically treatments for cancer, heart disease, cerebropathia, and rare and incurable illness - which has also led to losses.

“Hospitals have managed to avoid losses by earning profits from uninsured medical examinations, such as MRI (magnetic resonance imaging) scans or ultrasound screenings,” said Professor Cho Jae-guk, of the health and medical management department at Dongyang University. “But with the profits from these medical tests decreasing [because of the expanded insurance benefits, many] hospitals have fallen on hard times.”

Meanwhile, Seoul National University Hospital’s union members continued their strike yesterday, with no sign in sight of the two sides reaching an agreement.

About 400 of the union’s members joined the strike, though key staff members in the emergency room and intensive care unit remained on the job.

They are demanding a 13.7 percent wage increase, as well as full employment status for contract workers who have worked one year or more at the hospital.

Hundreds of the protesting union members also continued their sit-in protest yesterday in the lobby of the Yeongeon-dong hospital branch.

The strike by the hospital’s union that started early on Wednesday morning was the first time in six years that the union has staged a strike. In October 2007, the labor union staged a walkout that stalled hospital operations for six days.

No major disruptions in hospital operations occurred yesterday from the strike. Some complained about delays in patient transport and the poor preparation of patient meals.

But as the two parties remain gridlocked, worries over a prolonged strike have grown.

The union alleged that the hospital had made a profit over the past five years, but still called for a wage freeze, while making unnecessary cuts.

It also said the hospital was forcing workers and patients to shoulder the burden of its poor management decisions.

In response, the hospital said its projected loss will be 68 billion won this year and claimed the budget cuts and wage freeze were necessary to turn around the business situation.

BY SHIN SUNG-SIK, KANG JIN-KYU [jkkang2@joongang.co.kr]