Deficits mount at major hospitals as doctors' walkout drags on

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Deficits mount at major hospitals as doctors' walkout drags on

Published: 17 Oct. 2024, 17:09 Updated: 17 Oct. 2024, 19:13

LEE SOO-JUNG
lee.soojung1@joongang.co.kr

A patient and a guardian walk past an emergency room at a general hospital in Seoul on Wednesday. [YONHAP]

Seoul National University Hospital (SNUH) recorded a deficit of 162.8 billion won ($118 million) in the first six months of this year, indicating that the finances of large medical institutions have worsened significantly.

According to data from the Ministry of Health and Welfare received by the office of People Power Party Rep. Han Ze-ea on Thursday, the average net loss incurred in the first half of this year at the 12 general hospitals affiliated with public universities was 27.82 billion won.

The average net loss per hospital increased by 19.26 billion won on-year when each hospital saw around 8.56 billion won of net losses during the first and second quarters of last year.

The 162.8 billion won deficit at SNUH was the largest among other state-owned general hospitals affiliated with public universities.

SNUH’s branch in southern Gyeonggi, Seoul National University Bundang Hospital, saw a deficit of 41.8 billion won in the first half of this year despite last year’s surplus revenue of 30.8 billion won. In this calculation, SNUH’s Bundang branch lost 72.7 billion won on-year.

Hospital service downsizing prompted by the junior doctors’ walkout also severely affected privately owned medical centers nationwide, from the greater Seoul area to provincial regions.

Asan Medical Center in southern Seoul experienced a massive downturn in its balance sheet this year. Although the center posted a 74.9 billion won revenue in last year's first half, it experienced a 21.6 billion won deficit from January to June. Its net loss increased by 96.5 billion won on-year.

Seoul St. Mary’s Hospital had a deficit of 13.09 billion won, and Yonsei University’s Severance Hospital had a deficit of 16.03 billion won.

The four largest tertiary hospitals in the country — SNUH, Asan Medical Center, Severance Hospital and Seoul St. Mary’s Hospital — had a combined net loss of 213.5 billion won in the first half of this year.

In addition, at least 17 general hospitals managed by private universities reported deficits in the first six months of this year.

The 17 hospitals saw an average net income of 6.98 billion won from last year’s first to second quarters. However, they experienced a net loss of 3.37 billion won per hospital this year between January and June.

Rep. Han said the “prolonged medical service void aggravated financial stability of hospitals,” adding that an amendment to the Corporate Tax Act’s enforcement decree is needed to let hospitals use their special reserves to cover the incurred losses.

Not-for-profit corporations can save funds as a special reserve for facility investment and education, enjoying tax benefits for the reserve.

Yonhap News Agency on Thursday reported that 18 general hospitals under private universities have an average of 64.8 billion won in special reserves.

Medical professors and students from Kyungpook National University and Kangwon National University demand lawmakers working for the parliamentary education committee to accept their leave requests in Daegu on Thursday. [YONHAP]

On the same day, the presidential office said it could not modify medical school admission quotas for the 2025 academic year.

A high-ranking presidential official said during a press briefing that changing the enrollment size should have been finalized by May at the latest.

The official likened a change at this time to “changing the rules in the middle of the game,” as schools had already started receiving applications and screening their candidates.

The source added that the office is open to adjusting the enrollment size for incoming classes in the 2026 academic year.

The presidential office plans to add nearly 400 seats to the 2026 enrollment from the ongoing 2025 admission quota — which increased by 1,509 seats from the previous 3,058 seats — to complete its drive to add 2,000 seats to medical schools nationwide.

Any changes to the admissions scheme for the 2026 academic year should be finalized by May of next year.

Regarding criticism that expanded classroom sizes would overburden schools' teaching capacity, the official dismissed concerns, arguing that “courses given to students in their first academic year are theory-oriented rather than laboratory training and practicals.”

Update, Oct. 17: Added statement from the presidential office regarding enrollment seat hike in medical schools

BY LEE SOO-JUNG [lee.soojung1@joongang.co.kr]