Scaring away investment

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Scaring away investment

A project to create what would be the first for-profit hospital on the resort island of Jeju is expected to go under. According to a public poll, opposition to the plan was 58.9 percent compared to the 38.9 percent approving it. Since Jeju Gov. Won Hee-ryong accepted Jeju residents’ petition to hold a referendum on the matter, the outcome can be predicted with certainty.

Unlike general hospitals, an investor can reap returns from revenue made from a for-profit medical institution. That way, the investor can continue to invest in the medical institution. The government has been trying to establish for-profit hospitals since 2002 to push the country’s medical industry and technology to a new level and generate new revenue and jobs from the sector. Korea, with its excellent health care and medical professionals backed by high-tech capabilities, could leverage the industry into a new value-added services segment. Liberal President Roh Moo-hyun pushed a project conceived of by his predecessor and submitted a bill in 2007, but the legislation did not go through due to opposition from civic groups.

The following conservative government under President Lee Myung-bak also sought to allow foreign hospitals in economic free zones in 2012, which also did not survive prevailing negative sentiment about commercialization of medical services. The first for-profit hospital was finally allowed under the Park Geun-hye administration in 2015. The hospital invested in by Greenland Group, a real-estate developer half-owned by the city of Shanghai, spent 77.8 billion won ($69 million) to complete the construction of a 47-bed hospital in August 2017. It already has 100 doctors and nurses.

The country’s credibility is at stake if a foreign-led project licensed by the central government is rejected by a local government. The Chinese investor is expected to file suit against the central and local governments. A project that has been hanging for nearly two decades has been trashed largely because the liberal Moon Jae-in government disapproved of for-profit hospitals. For-profit hospitals are common in other countries. It is a pity that something so easy elsewhere is this hard in Korea. It is no wonder that jobs are becoming scarcer and scarcer.

JoongAng Sunday, Oct. 6, Page 34
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