Don’t ignore medical service industry

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Don’t ignore medical service industry

With increased incomes and aging of the population, demand for high-quality medical care is increasing, and the medical industry is considered one of the key high-added-value industries. The fundamental reason for the developed world to consider the medical industry as the leader in the fourth industrial revolution is the significant social benefit that results from improved medical efficiency.

Last month, the government announced its 100 goals, including health care reform. Also, a 30 trillion won health insurance coverage enhancement program was presented. The nation welcomes the government policy to strengthen the health care system. However, the increased budget needed for expanded coverage would return as a burden to the people someday. We need a plan to reduce the effective medical cost of a solid public health care system.

Chronic illness is the main cause of increasing medial costs. While it is necessary to expand coverage for patients, the government needs to also focus on health maintenance and disease control to keep up with global trends. Since the effect is not immediate despite increased budgets, the government may encourage the participation of the private sector by easing regulations for remote medical services and health management systems. Improving health management systems would be a smart way to improve public health care as it can reduce occurrences of chronic illnesses and lower medical costs.

It is impossible for the government to completely cover all medical services, as it will result in inefficiency of moral hazard and excessive medical services. Since the state responsibility for medical services has its limits, the private sector should be encouraged to play a supplementary role.

It is regrettable that the top 100 state tasks do not include medical services in the key future industries, when medical services makes up 5 percent of the GDP and 75 percent of the medical industry. Over 10 years ago, the Roh Moo-hyun administration established the Medical Industry Advancement committee and promoted a medical services promotion plan that suffers nothing in comparison to today’s trend.

Despite the possibility for the world’s first truly innovative medical services, remote medical examination and health management services have remained as pilot programs for over ten years, and they seem to be phased out in the new administration. A new medical service industry promotion plan put forth by the government, the private sector, the medical industry and other fields needs to drafted to enhance public health care and efficiency.

*Professor of economics at Seoul National University

Hong Suk-cheol
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